Implement Maine PTFC unknown-utilities 15% rule (Schedule PTFC line 5c)

changelog.d/me-ptfc-utilities-in-rent.added.md

@@ -0,0 +1 @@
+Implemented the Schedule PTFC/STFC line 5c rule for the Maine property tax fairness credit: when rent paid (Schedule PTFC/STFC line 5a) includes heat, utilities, furniture, or similar items and the amount is not known, exclude 15% of rent paid before computing rent constituting property taxes.

policyengine_us/parameters/gov/states/me/tax/income/credits/fairness/property_tax/rate/rent.yaml

@@ -12,7 +12,5 @@ metadata:
       href: https://www.maine.gov/revenue/sites/maine.gov.revenue/files/inline-files/22_1040me_sched_pstfc_ff.pdf#page=2
     - title: 2023 Form 1040ME Property Tax Fairness Credit / Sales Tax Fairness Credit Line 5(e)
       href: https://www.maine.gov/revenue/sites/maine.gov.revenue/files/inline-files/23_1040me_sched_pstfc_ff.pdf#page=1
-    - title: 2024 Form 1040ME Property Tax Fairness Credit / Sales Tax Fairness Credit Line 5(e)
-      href: https://www.maine.gov/revenue/sites/maine.gov.revenue/files/inline-files/23_1040me_sched_pstfc_ff.pdf#page=1
   period: year
-  label: Maine property tax fairness credit income rate
+  label: Maine property tax fairness credit rent rate

policyengine_us/parameters/gov/states/me/tax/income/credits/fairness/property_tax/rate/utilities_share_of_rent.yaml

@@ -0,0 +1,21 @@
+description: Maine excludes this share of rent paid as attributable to heat, utilities, furniture, or similar items when the amount is not known under the property tax fairness credit.
+values:
+  2014-01-01: 0.15
+# §5219-KK is intentionally NOT cited for this 15%: the statute defines the
+# utilities-exclusion concept but gives no estimate for an unknown amount, and
+# its only 15% is the separate line-5e rent rate (see rate/rent.yaml). The
+# unknown-amount estimate appears only in the Schedule PTFC/STFC line 5c
+# instructions.
+metadata:
+  unit: /1
+  period: year
+  label: Maine property tax fairness credit utilities share of rent estimate
+  reference:
+    - title: §5219-KK. Property tax fairness credit (1) (E)
+      href: https://legislature.maine.gov/statutes/36/title36sec5219-KK.html
+    - title: 2014 Form 1040ME Schedule PTFC, line 5c
+      href: https://www.maine.gov/revenue/sites/maine.gov.revenue/files/inline-files/14_1040_sched%20ptfc_download.pdf#page=2
+    - title: 2022 Form 1040ME Schedule PTFC/STFC, line 5c
+      href: https://www.maine.gov/revenue/sites/maine.gov.revenue/files/inline-files/22_1040me_sched_pstfc_ff.pdf#page=2
+    - title: 2023 Form 1040ME Schedule PTFC/STFC, line 5c
+      href: https://www.maine.gov/revenue/sites/maine.gov.revenue/files/inline-files/23_1040me_sched_pstfc_ff.pdf#page=1

policyengine_us/tests/policy/baseline/gov/states/me/tax/income/credits/property_tax_fairness_credit/me_property_tax_fairness_credit.yaml

@@ -28,3 +28,83 @@
   output:
     me_property_tax_fairness_credit: 0
 
+- name: Case 4, rent includes utilities but amount unknown flows through to a positive credit via the 15% line-5c estimate
+  period: 2022
+  input:
+    people:
+      person1:
+        age: 40
+        rent: 6_000
+    tax_units:
+      tax_unit:
+        members: [person1]
+        filing_status: SINGLE
+        utilities_included_in_rent: true
+        me_property_tax_fairness_credit_utilities_in_rent_amount: 0
+    households:
+      household:
+        members: [person1]
+        state_code: ME
+  output:
+    # Amount unknown (0) -> line 5c estimate = 15% * 6000 = 900.
+    # Countable rent = 15% * (6000 - 900) = 15% * 5100 = 765.
+    # No real estate taxes -> countable_rent_property_tax = 765.
+    # Single benefit base (2200) >= 765, income 0 so no phase-out,
+    # non-senior cap 1000 does not bind: credit = min(765, 1000) = 765.
+    # Without the estimate the credit would be 15% * 6000 = 900, so the
+    # line-5c estimate reduces the credit to 765.
+    me_property_tax_fairness_credit: 765
+  absolute_error_margin: 0.01
+
+- name: Case 5, renter and owner combined, rent with unknown utilities plus real estate taxes.
+  period: 2022
+  input:
+    people:
+      person1:
+        age: 40
+        rent: 4_000
+        real_estate_taxes: 200
+    tax_units:
+      tax_unit:
+        members: [person1]
+        filing_status: SINGLE
+        utilities_included_in_rent: true
+        me_property_tax_fairness_credit_utilities_in_rent_amount: 0
+    households:
+      household:
+        members: [person1]
+        state_code: ME
+  output:
+    # Amount unknown (0) -> line 5c estimate = 15% * 4000 = 600.
+    # Countable rent = 15% * (4000 - 600) = 15% * 3400 = 510.
+    # Property tax equivalent = countable rent 510 + real estate taxes 200 = 710.
+    # Single benefit base (2200) >= 710, income 0 so no phase-out, non-senior cap
+    # 1000 does not bind: credit = min(710, 1000) = 710.
+    me_property_tax_fairness_credit: 710
+  absolute_error_margin: 0.01
+
+- name: Case 6, rent includes utilities with a known amount, flows to a positive credit.
+  period: 2022
+  input:
+    people:
+      person1:
+        age: 40
+        rent: 6_000
+    tax_units:
+      tax_unit:
+        members: [person1]
+        filing_status: SINGLE
+        utilities_included_in_rent: true
+        me_property_tax_fairness_credit_utilities_in_rent_amount: 1_000
+    households:
+      household:
+        members: [person1]
+        state_code: ME
+  output:
+    # Known amount 1000 subtracted from rent paid 6000.
+    # Countable rent = 15% * (6000 - 1000) = 15% * 5000 = 750.
+    # No real estate taxes -> countable_rent_property_tax = 750.
+    # Single benefit base (2200) >= 750, income 0 so no phase-out, non-senior cap
+    # 1000 does not bind: credit = min(750, 1000) = 750.
+    me_property_tax_fairness_credit: 750
+  absolute_error_margin: 0.01

policyengine_us/tests/policy/baseline/gov/states/me/tax/income/credits/property_tax_fairness_credit/me_property_tax_fairness_credit_countable_rent.yaml

@@ -1,21 +1,223 @@
-- name: Case 1, utilities did not include in rent
+# Note: p.rate.utilities_share_of_rent and p.rate.rent are both 0.15, so
+# baseline cases cannot distinguish the two rates. Avoid any known-amount case
+# where the amount equals 0.15 * rent (both branches would coincide).
+- name: Case 1, utilities not included in rent, full rent counts.
   period: 2022
   input:
     state_code: ME
     rent: 1_000
     utilities_included_in_rent: false
-    utility_expense: 50
   output:
     me_property_tax_fairness_credit_countable_rent: 150
-    # 1000*0.15 = 150
-
-- name: Case 2, utilities included in rent
+    # 1000 * 0.15 = 150
+  absolute_error_margin: 0.01
+
+- name: Case 2, utilities included in rent, amount known.
   period: 2022
   input:
     state_code: ME
     rent: 1_000
     utilities_included_in_rent: true
-    utility_expense: 50
+    me_property_tax_fairness_credit_utilities_in_rent_amount: 50
   output:
     me_property_tax_fairness_credit_countable_rent: 142.5
-    # 950*0.15 = 142.5
+    # (1000 - 50) * 0.15 = 142.5
+  absolute_error_margin: 0.01
+
+- name: Case 3, utilities included but amount unknown, deduct 15% of rent (line 5c).
+  period: 2022
+  input:
+    state_code: ME
+    rent: 1_000
+    utilities_included_in_rent: true
+    me_property_tax_fairness_credit_utilities_in_rent_amount: 0
+  output:
+    me_property_tax_fairness_credit_countable_rent: 127.5
+    # utility portion = 15% * 1000 = 150; (1000 - 150) * 0.15 = 127.5
+  absolute_error_margin: 0.01
+
+- name: Case 4, utilities included, amount unknown; separately-paid utility expenses ignored.
+  period: 2022
+  input:
+    state_code: ME
+    rent: 12_000
+    utilities_included_in_rent: true
+    me_property_tax_fairness_credit_utilities_in_rent_amount: 0
+    heating_cooling_expense: 600
+  output:
+    me_property_tax_fairness_credit_countable_rent: 1_530
+    # amount unknown -> line 5c estimate = 15% * 12000 = 1800;
+    # (12000 - 1800) * 0.15 = 10200 * 0.15 = 1530.
+    # The household's separately-paid utility expense (heating_cooling_expense
+    # 600, part of utility_expense) is not subtracted from rent paid.
+  absolute_error_margin: 0.01
+
+- name: Case 5, known amount exceeds rent, net rent clamped to 0 (invalid-input guard).
+  period: 2022
+  input:
+    state_code: ME
+    rent: 2_400
+    utilities_included_in_rent: true
+    me_property_tax_fairness_credit_utilities_in_rent_amount: 3_600
+  output:
+    me_property_tax_fairness_credit_countable_rent: 0
+    # Invalid input: line 5c (3600) exceeds line 5a rent (2400). The clamp guards
+    # this inconsistency; this is not a Maine-published result.
+    # net rent = max(2400 - 3600, 0) = 0; 0 * 0.15 = 0.
+  absolute_error_margin: 0.01
+
+- name: Case 6, known amount exactly equals rent, net rent clamps to 0 (invalid-input guard).
+  period: 2022
+  input:
+    state_code: ME
+    rent: 3_000
+    utilities_included_in_rent: true
+    me_property_tax_fairness_credit_utilities_in_rent_amount: 3_000
+  output:
+    me_property_tax_fairness_credit_countable_rent: 0
+    # Invalid input: line 5c (3000) equals line 5a rent (3000). The clamp is
+    # exercised at the boundary; this is not a Maine-published result.
+    # net rent = max(3000 - 3000, 0) = 0; 0 * 0.15 = 0.
+  absolute_error_margin: 0.01
+
+- name: Case 7, utilities not included but nonzero amount recorded, amount ignored.
+  period: 2022
+  input:
+    state_code: ME
+    rent: 1_000
+    utilities_included_in_rent: false
+    me_property_tax_fairness_credit_utilities_in_rent_amount: 400
+  output:
+    me_property_tax_fairness_credit_countable_rent: 150
+    # Line 5b is "no", so line 5c is entered as 0 regardless of the recorded
+    # amount. Full rent counts: 1000 * 0.15 = 150. An ungated subtraction would
+    # instead give (1000 - 400) * 0.15 = 90.
+  absolute_error_margin: 0.01
+
+- name: Case 8, utilities included, known amount, separately-paid utility expenses ignored.
+  period: 2022
+  input:
+    state_code: ME
+    rent: 12_000
+    utilities_included_in_rent: true
+    me_property_tax_fairness_credit_utilities_in_rent_amount: 1_200
+    heating_cooling_expense: 600
+  output:
+    me_property_tax_fairness_credit_countable_rent: 1_620
+    # Known amount 1200 subtracted: (12000 - 1200) * 0.15 = 10800 * 0.15 = 1620.
+    # A reintroduced utility_expense subtraction would give
+    # (12000 - 1200 - 600) * 0.15 = 1530.
+  absolute_error_margin: 0.01
+
+- name: Case 9, multi-person joint filers, rent aggregated across members, amount unknown.
+  period: 2022
+  input:
+    people:
+      person1:
+        age: 40
+        rent: 6_000
+      person2:
+        age: 40
+        rent: 4_000
+    tax_units:
+      tax_unit:
+        members: [person1, person2]
+        filing_status: JOINT
+        utilities_included_in_rent: true
+        me_property_tax_fairness_credit_utilities_in_rent_amount: 0
+    households:
+      household:
+        members: [person1, person2]
+        state_code: ME
+  output:
+    me_property_tax_fairness_credit_countable_rent: 1_275
+    # Rent aggregates to 6000 + 4000 = 10000; amount unknown -> line 5c estimate
+    # = 15% * 10000 = 1500; (10000 - 1500) * 0.15 = 8500 * 0.15 = 1275.
+  absolute_error_margin: 0.01
+
+- name: Case 10, zero rent with utilities included, amount known, countable rent 0.
+  period: 2022
+  input:
+    state_code: ME
+    rent: 0
+    utilities_included_in_rent: true
+    me_property_tax_fairness_credit_utilities_in_rent_amount: 500
+  output:
+    me_property_tax_fairness_credit_countable_rent: 0
+    # net rent = max(0 - 500, 0) = 0; 0 * 0.15 = 0.
+  absolute_error_margin: 0.01
+
+- name: Case 11, zero rent with utilities included, amount unknown, countable rent 0.
+  period: 2022
+  input:
+    state_code: ME
+    rent: 0
+    utilities_included_in_rent: true
+    me_property_tax_fairness_credit_utilities_in_rent_amount: 0
+  output:
+    me_property_tax_fairness_credit_countable_rent: 0
+    # estimate = 15% * 0 = 0; (0 - 0) * 0.15 = 0.
+  absolute_error_margin: 0.01
+
+- name: Case 12, one-dollar known amount just above the zero sentinel, estimate not used.
+  period: 2022
+  input:
+    state_code: ME
+    rent: 1_000
+    utilities_included_in_rent: true
+    me_property_tax_fairness_credit_utilities_in_rent_amount: 1
+  output:
+    me_property_tax_fairness_credit_countable_rent: 149.85
+    # Amount 1 > 0 so it is treated as known: (1000 - 1) * 0.15 = 149.85.
+    # At amount 0 the estimate branch gives 127.5, so 1 dollar pins the >0
+    # sentinel boundary.
+  absolute_error_margin: 0.01
+
+- name: Case 13, negative recorded amount falls into the unknown estimate branch.
+  period: 2022
+  input:
+    state_code: ME
+    rent: 1_000
+    utilities_included_in_rent: true
+    me_property_tax_fairness_credit_utilities_in_rent_amount: -100
+  output:
+    me_property_tax_fairness_credit_countable_rent: 127.5
+    # amount is not > 0, so the 15%-of-rent estimate applies: same as unknown.
+    # estimate = 15% * 1000 = 150; (1000 - 150) * 0.15 = 127.5.
+  absolute_error_margin: 0.01
+
+- name: Case 14, default inputs, rent only with nothing else set, plain 15% of rent.
+  period: 2022
+  input:
+    state_code: ME
+    rent: 1_000
+  output:
+    me_property_tax_fairness_credit_countable_rent: 150
+    # utilities_included_in_rent defaults to false -> utility portion 0;
+    # 1000 * 0.15 = 150. This is the path the microdata population takes.
+  absolute_error_margin: 0.01
+
+- name: Case 15, unknown branch at the 2014 program start pins the start date.
+  period: 2014
+  input:
+    state_code: ME
+    rent: 1_000
+    utilities_included_in_rent: true
+    me_property_tax_fairness_credit_utilities_in_rent_amount: 0
+  output:
+    me_property_tax_fairness_credit_countable_rent: 127.5
+    # estimate = 15% * 1000 = 150; (1000 - 150) * 0.15 = 127.5. Confirms the
+    # utilities_share_of_rent parameter is in effect from 2014-01-01.
+  absolute_error_margin: 0.01
+
+- name: Case 16, unknown branch at 2024 confirms parameter continuity.
+  period: 2024
+  input:
+    state_code: ME
+    rent: 1_000
+    utilities_included_in_rent: true
+    me_property_tax_fairness_credit_utilities_in_rent_amount: 0
+  output:
+    me_property_tax_fairness_credit_countable_rent: 127.5
+    # estimate = 15% * 1000 = 150; (1000 - 150) * 0.15 = 127.5.
+  absolute_error_margin: 0.01

policyengine_us/variables/gov/states/me/tax/income/credits/fairness/property_tax_fairness_credit/me_property_tax_fairness_credit_countable_rent.py

@@ -13,11 +13,25 @@ class me_property_tax_fairness_credit_countable_rent(Variable):
     def formula(tax_unit, period, parameters):
         p = parameters(period).gov.states.me.tax.income.credits.fairness.property_tax
         rent = add(tax_unit, period, ["rent"])
-        utilities_included_in_rent = tax_unit("utilities_included_in_rent", period)
-        utility_expenses = add(tax_unit, period, ["utility_expense"])
-        # A separate calculation exists for the case where utilities are included in rent
-        # if the filer does not know the portion of rent that is attributable to utilities
-        # This is not implemented
-        deductible_utility_expenses = utilities_included_in_rent * utility_expenses
-        net_rent = rent - deductible_utility_expenses
+        # utilities_included_in_rent is the generic household boolean, used here
+        # as a narrower-named proxy for Schedule PTFC/STFC line 5b (does rent
+        # paid include heat, utilities, furniture, or similar items?).
+        included = tax_unit("utilities_included_in_rent", period)
+        # Line 5c: the amount of heat, utilities, furniture, or similar items
+        # included in rent paid (line 5a). A zero here is a sentinel meaning the
+        # amount is unknown, so we subtract the 15%-of-rent estimate instead of a
+        # known dollar amount. This is distinct from the household's general
+        # utility_expense (separately-paid utilities), which is not subtracted.
+        included_amount = tax_unit(
+            "me_property_tax_fairness_credit_utilities_in_rent_amount", period
+        )
+        utility_portion = included * where(
+            included_amount > 0,
+            included_amount,
+            rent * p.rate.utilities_share_of_rent,
+        )
+        # Clamp guards inconsistent user input: on the unknown branch the base is
+        # 0.85 * line 5a (always non-negative), and on the known branch line 5c is
+        # a component of line 5a, so a subtraction below zero reflects bad input.
+        net_rent = max_(rent - utility_portion, 0)
         return net_rent * p.rate.rent

policyengine_us/variables/gov/states/me/tax/income/credits/fairness/property_tax_fairness_credit/me_property_tax_fairness_credit_utilities_in_rent_amount.py

@@ -0,0 +1,11 @@
+from policyengine_us.model_api import *
+
+
+class me_property_tax_fairness_credit_utilities_in_rent_amount(Variable):
+    value_type = float
+    entity = TaxUnit
+    unit = USD
+    label = "Amount of heat, utilities, furniture, or similar items included in rent for the Maine property tax fairness credit"
+    definition_period = YEAR
+    defined_for = StateCode.ME
+    reference = "https://www.maine.gov/revenue/sites/maine.gov.revenue/files/inline-files/22_1040me_sched_pstfc_ff.pdf#page=2"