Bump policyengine-us to >=1.711.0; pin otherprop→NIIT behavior

changelog.d/bump-pe-us-and-niit-test.added.md

@@ -0,0 +1 @@
+Bump `policyengine-us` to `>=1.711.0` (picks up the upstream fix that unwires UT Homeowner/Renter Relief from TC-40 refundable credits, per Utah Tax Commission TC-90CB/TC-90H). Add integration test pinning the TAXSIM `otherprop` → PE-US `rental_income` + NIIT routing against IRC § 1411(c)(1)(A)(i) and the TAXSIM-35 binary.

pyproject.toml

@@ -22,7 +22,7 @@ classifiers = [
     "Programming Language :: Python :: 3.12",
 ]
 dependencies = [
-    "policyengine-us>=1.552.0",
+    "policyengine-us>=1.711.0",
     "pandas",
     "PyYAML",
     "click",

tests/test_otherprop_niit.py

@@ -0,0 +1,132 @@
+"""
+Tests for TAXSIM `otherprop` → PE-US `rental_income` routing and NIIT.
+
+Legal anchors:
+- IRC § 1411(c)(1)(A)(i): NIIT base includes "gross income from interest,
+  dividends, annuities, royalties, and rents, other than such income which
+  is derived in the ordinary course of a trade or business not described
+  in paragraph (2)".
+  https://www.law.cornell.edu/uscode/text/26/1411
+- Form 8960 Line 4a: "Income From Trades/Businesses/Farming, Rental Real
+  Estate, Royalties, Partnerships, S Corporations, and Trusts".
+  https://www.irs.gov/instructions/i8960
+- IRC § 199A(d)(1): QBID requires a "qualified trade or business";
+  passive individual rental income generally does not qualify absent the
+  Reg § 1.199A-1(b)(14) safe harbor, which TAXSIM input cannot signal.
+
+TAXSIM-35 binary probe (single, age 45, otherprop=$1M, no other income,
+year 2024) produces fiitax=$353,188 and niit=$30,400 (= 3.8% × ($1M −
+$200K threshold)). PE-US must align via:
+  variable_mappings.yaml: otherprop → rental_income
+  policyengine_runner: rental_income_would_be_qualified=False for chunks
+                       carrying otherprop, suppressing the QBID gate.
+
+These tests pin both legs so a future mapping edit can't silently
+re-route otherprop away from the NIIT base or re-enable auto-QBID.
+"""
+
+import pandas as pd
+import pytest
+
+from policyengine_taxsim.runners.policyengine_runner import PolicyEngineRunner
+
+
+def _single_otherprop_record():
+    """Pure-otherprop probe: matches the TAXSIM-35 binary smoke test."""
+    return pd.DataFrame(
+        {
+            "taxsimid": [1],
+            "year": 2024,
+            "state": [5],  # CA
+            "mstat": 1,
+            "depx": 0,
+            "page": 45,
+            "sage": 0,
+            "pwages": 0.0,
+            "swages": 0.0,
+            "otherprop": [1_000_000.0],
+            "idtl": 2,
+        }
+    )
+
+
+def _mixed_record_no_otherprop():
+    """Control: wages-only, no otherprop. Confirms NIIT only fires on
+    investment-type income above the threshold."""
+    return pd.DataFrame(
+        {
+            "taxsimid": [2],
+            "year": 2024,
+            "state": [5],
+            "mstat": 1,
+            "depx": 0,
+            "page": 45,
+            "sage": 0,
+            "pwages": [1_000_000.0],
+            "swages": 0.0,
+            "otherprop": 0.0,
+            "idtl": 2,
+        }
+    )
+
+
+class TestOtherpropNIIT:
+    """Pin the otherprop → rental_income + NIIT behavior to TAXSIM-35."""
+
+    def test_otherprop_drives_niit_at_3_8_percent(self):
+        """
+        $1M of pure `otherprop`, single, age 45 must trigger NIIT of
+        3.8% × ($1M − $200K single threshold) = $30,400 — matching the
+        TAXSIM-35 binary and Form 8960 Line 4a.
+        """
+        records = _single_otherprop_record()
+        runner = PolicyEngineRunner(records.copy(), logs=False)
+        result = runner.run(show_progress=False)
+        # NIIT column on TAXSIM v50 / PE niit output
+        niit = float(result["niit"].iloc[0])
+        assert niit == pytest.approx(30_400, abs=10), (
+            f"Expected NIIT=$30,400 (3.8% × $800K) for $1M otherprop single, "
+            f"got ${niit:.2f}. Likely cause: otherprop no longer routes to "
+            f"rental_income, or rental_income dropped out of "
+            f"gov.irs.investment.income.sources upstream."
+        )
+
+    def test_otherprop_does_not_trigger_qbid(self):
+        """
+        TAXSIM does not apply § 199A QBID to `otherprop` — only the
+        explicit `pbusinc` input triggers QBID. PE-US's
+        `rental_income_would_be_qualified` defaults to True, so the
+        runner must override it to False when otherprop is present.
+        Verify by comparing fiitax against the TAXSIM-35 binary result
+        of $353,188 for a $1M otherprop single filer.
+        """
+        records = _single_otherprop_record()
+        runner = PolicyEngineRunner(records.copy(), logs=False)
+        result = runner.run(show_progress=False)
+        fiitax = float(result["fiitax"].iloc[0])
+        # TAXSIM-35 binary: $353,187.93. Allow $50 rounding because PE-US
+        # and TAXSIM use slightly different bracket-mid points.
+        assert fiitax == pytest.approx(353_188, abs=50), (
+            f"Expected fiitax≈$353,188 to match TAXSIM-35 binary for $1M "
+            f"otherprop single. Got ${fiitax:.2f}. Spread of >$50 typically "
+            f"means PE applied QBID (~$170K reduction) on the rental_income, "
+            f"indicating the QBID gate override in policyengine_runner "
+            f"is not firing for this chunk."
+        )
+
+    def test_no_otherprop_no_niit_on_wages(self):
+        """
+        Wages-only filer should not generate NIIT regardless of size.
+        Acts as a negative control on the routing: the override should
+        only suppress QBID for tax units carrying otherprop, and NIIT
+        should remain governed by investment-income sources.
+        """
+        records = _mixed_record_no_otherprop()
+        runner = PolicyEngineRunner(records.copy(), logs=False)
+        result = runner.run(show_progress=False)
+        niit = float(result["niit"].iloc[0])
+        assert niit == pytest.approx(0, abs=1), (
+            f"Wages-only filer must not owe NIIT, got ${niit:.2f}. "
+            f"Could indicate otherprop's QBID override is leaking and "
+            f"reclassifying wages."
+        )