From ac1cb6d51e2564be376a6d123194e7f8a1457ef4 Mon Sep 17 00:00:00 2001
From: Anthony Volk <anth.volk@gmail.com>
Date: Tue, 29 Oct 2024 16:21:44 +0100
Subject: [PATCH] fix: Alter VA reduced itemized deductions based on changes to
 TCJA

---
 .../va_reduced_itemized_deductions.py         | 40 ++++++++++++++-----
 1 file changed, 29 insertions(+), 11 deletions(-)

diff --git a/policyengine_us/variables/gov/states/va/tax/income/deductions/va_reduced_itemized_deductions.py b/policyengine_us/variables/gov/states/va/tax/income/deductions/va_reduced_itemized_deductions.py
index d4e9afef3f8..195b157061d 100644
--- a/policyengine_us/variables/gov/states/va/tax/income/deductions/va_reduced_itemized_deductions.py
+++ b/policyengine_us/variables/gov/states/va/tax/income/deductions/va_reduced_itemized_deductions.py
@@ -32,15 +32,26 @@ def formula(tax_unit, period, parameters):
         excess_ded = max_(applicable_ded - reducible_ded, 0)
         # If 0 - no reduction
         # Line 4 - IRS deduction rate of excess
+
         # The federal limitation on itemized deductions does not apply during the TCJA period
         # Virginia still applies the limitation
-        year = period.start.year
-        if year >= 2018 and year <= 2026:
-            instant_str = f"2017-01-01"
-        else:
-            instant_str = period
-        p_irs = parameters(instant_str).gov.irs.deductions.itemized.limitation
-        excess_ded_fraction = excess_ded * p_irs.itemized_deduction_rate
+
+        # Here, we use a parameter that mostly keeps in line with the IRS's;
+        # Virginia follows the IRS, except for TCJA-related policies, hence we
+        # remove anything TCJA related, but keep everything else coupled to the IRS
+
+        # Shortcut to the full parameter, not parameter at instant, for IRS itemized limitations
+        full_irs_param: Parameter = parameters.gov.irs.deductions.itemized.limitation
+
+        va_itemized_deduction_rate = full_irs_param.itemized_deduction_rate.clone()
+
+        # Eliminate infinite values created by the TCJA's elimination of this param
+        va_itemized_deduction_rate.values_list = [
+            entry for entry in va_itemized_deduction_rate.values_list 
+            if not (entry.value == np.inf or entry.value == -np.inf)
+        ]
+
+        excess_ded_fraction = excess_ded * va_itemized_deduction_rate(period)
         # Line 5 Federal AGI
         federal_agi = tax_unit("adjusted_gross_income", period)
         # Line 6 - applicable amount
@@ -49,7 +60,16 @@ def formula(tax_unit, period, parameters):
         # Line 7 - excess
         excess = max_(federal_agi - applicable_amount, 0)
         # Line 8 - excess times federal item. ded. AGI rate
-        agi_adjustment = p_irs.agi_rate * excess
+
+        # Here again, Virginia follows the IRS, except for TCJA-related policies,
+        # and we'll need to eliminate infinite values created by TCJA abolishing param
+        va_agi_rate = full_irs_param.agi_rate.clone()
+        va_agi_rate.values_list = [
+            entry for entry in va_agi_rate.values_list 
+            if not (entry.value == np.inf or entry.value == -np.inf)
+        ]
+
+        agi_adjustment = va_agi_rate(period) * excess
         # Line 9 - min of line 4 and line 8
         va_itm_deds_adjustment = min_(agi_adjustment, excess_ded_fraction)
         # Output from Part A (Line 1 - Line 9)
@@ -70,9 +90,7 @@ def formula(tax_unit, period, parameters):
             "va_capped_state_and_local_sales_or_income_tax", period
         )
 
-        state_and_local_tax_adj = (
-            capped_state_and_local_tax * adjustment_fraction
-        )
+        state_and_local_tax_adj = capped_state_and_local_tax * adjustment_fraction
         # Line 15 - Subtract Line 14 from Line 13
         reduced_state_and_local_tax = max_(
             capped_state_and_local_tax - state_and_local_tax_adj, 0