Zero out FUTA credit reduction for states that exited credit-reduction status

changelog.d/fix-futa-credit-reduction-zero-out.fixed.md

@@ -0,0 +1 @@
+Return the FUTA credit reduction rate to zero for AR, AZ, CT, DE, FL, GA, and IL in the year each state exited credit-reduction status, per IRS Schedule A (Form 940).

policyengine_us/parameters/gov/irs/payroll/federal_unemployment/credit_reduction_rate.yaml

@@ -8,6 +8,12 @@ metadata:
   reference:
     - title: Historical FUTA Credit Reductions
       href: https://oui.doleta.gov/unemploy/docs/reduced_credit_states_2010-2025.xlsx
+    - title: Schedule A (Form 940) for 2013
+      href: https://www.irs.gov/pub/irs-prior/f940sa--2013.pdf
+    - title: Schedule A (Form 940) for 2014
+      href: https://www.irs.gov/pub/irs-prior/f940sa--2014.pdf
+    - title: Schedule A (Form 940) for 2023 (credit-reduction jurisdictions listed in the instructions)
+      href: https://www.irs.gov/pub/irs-prior/f940sa--2023.pdf#page=2
 AA:
   0000-01-01: 0
 AE:
@@ -23,9 +29,11 @@ AR:
   2011-01-01: 0.003
   2012-01-01: 0.006
   2013-01-01: 0.009
+  2014-01-01: 0
 AZ:
   0000-01-01: 0
   2012-01-01: 0.003
+  2013-01-01: 0
 CA:
   0000-01-01: 0
   2011-01-01: 0.003
@@ -51,21 +59,25 @@ CT:
   2015-01-01: 0.021
   2016-01-01: 0
   2022-01-01: 0.003
+  2023-01-01: 0
 DC:
   0000-01-01: 0
 DE:
   0000-01-01: 0
   2012-01-01: 0.003
   2013-01-01: 0.006
+  2014-01-01: 0
 FL:
   0000-01-01: 0
   2011-01-01: 0.003
   2012-01-01: 0.006
+  2013-01-01: 0
 GA:
   0000-01-01: 0
   2011-01-01: 0.003
   2012-01-01: 0.006
   2013-01-01: 0.009
+  2014-01-01: 0
 GU:
   0000-01-01: 0
 HI:
@@ -79,6 +91,7 @@ IL:
   2011-01-01: 0.003
   2012-01-01: 0
   2022-01-01: 0.003
+  2023-01-01: 0
 IN:
   0000-01-01: 0
   2010-01-01: 0.003

policyengine_us/tests/policy/baseline/gov/irs/payroll/unemployment/employer_federal_unemployment_tax.yaml

@@ -21,3 +21,113 @@
   output:
     employer_federal_unemployment_tax_rate: 0.018
     employer_federal_unemployment_tax: 126
+
+- name: Florida's credit reduction applies in 2012.
+  period: 2012
+  input:
+    state_code: FL
+    payroll_tax_gross_wages: 10_000
+  output:
+    employer_federal_unemployment_tax_rate: 0.012
+    employer_federal_unemployment_tax: 84
+
+- name: Florida returns to the standard rate in 2013 after repaying its loans.
+  period: 2013
+  input:
+    state_code: FL
+    payroll_tax_gross_wages: 10_000
+  output:
+    employer_federal_unemployment_tax_rate: 0.006
+    employer_federal_unemployment_tax: 42
+
+- name: Georgia returns to the standard rate in 2014 after repaying its loans.
+  period: 2014
+  input:
+    state_code: GA
+    payroll_tax_gross_wages: 10_000
+  output:
+    employer_federal_unemployment_tax_rate: 0.006
+    employer_federal_unemployment_tax: 42
+
+- name: Connecticut returns to the standard rate in 2023 after repaying its loans.
+  period: 2023
+  input:
+    state_code: CT
+    payroll_tax_gross_wages: 10_000
+  output:
+    employer_federal_unemployment_tax_rate: 0.006
+    employer_federal_unemployment_tax: 42
+
+- name: Illinois returns to the standard rate in 2023 after repaying its loans.
+  period: 2023
+  input:
+    state_code: IL
+    payroll_tax_gross_wages: 10_000
+  output:
+    employer_federal_unemployment_tax_rate: 0.006
+    employer_federal_unemployment_tax: 42
+
+- name: Arizona returns to the standard rate in 2013 after repaying its loans.
+  period: 2013
+  input:
+    state_code: AZ
+    payroll_tax_gross_wages: 10_000
+  output:
+    employer_federal_unemployment_tax_rate: 0.006
+    employer_federal_unemployment_tax: 42
+
+- name: Arkansas returns to the standard rate in 2014 after repaying its loans.
+  period: 2014
+  input:
+    state_code: AR
+    payroll_tax_gross_wages: 10_000
+  output:
+    employer_federal_unemployment_tax_rate: 0.006
+    employer_federal_unemployment_tax: 42
+
+- name: Delaware returns to the standard rate in 2014 after repaying its loans.
+  period: 2014
+  input:
+    state_code: DE
+    payroll_tax_gross_wages: 10_000
+  output:
+    employer_federal_unemployment_tax_rate: 0.006
+    employer_federal_unemployment_tax: 42
+
+- name: Florida stays at the standard rate in 2015, two years after exiting (the zero persists).
+  period: 2015
+  input:
+    state_code: FL
+    payroll_tax_gross_wages: 10_000
+  output:
+    employer_federal_unemployment_tax_rate: 0.006
+    employer_federal_unemployment_tax: 42
+
+- name: Florida stays at the standard rate in 2026, well after exiting (the zero does not carry a stale rate forward).
+  period: 2026
+  input:
+    state_code: FL
+    payroll_tax_gross_wages: 10_000
+  output:
+    employer_federal_unemployment_tax_rate: 0.006
+    employer_federal_unemployment_tax: 42
+
+- name: California is still a credit-reduction state in 2023, so the reduction still applies.
+  period: 2023
+  input:
+    state_code: CA
+    payroll_tax_gross_wages: 10_000
+  output:
+    # 2023 credit reduction 0.006 on top of the 0.006 net FUTA rate.
+    employer_federal_unemployment_tax_rate: 0.012
+    employer_federal_unemployment_tax: 84
+
+- name: Connecticut is still reduced in 2022, the year before it exits.
+  period: 2022
+  input:
+    state_code: CT
+    payroll_tax_gross_wages: 10_000
+  output:
+    # 2022 credit reduction 0.003 on top of the 0.006 net FUTA rate.
+    employer_federal_unemployment_tax_rate: 0.009
+    employer_federal_unemployment_tax: 63