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Zero imputed Medicare Part B premiums to restore TAXSIM parity #993

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Zero imputed Medicare Part B premiums to restore TAXSIM parity #993

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1 change: 1 addition & 0 deletions changelog.d/zero-imputed-medical-premiums.fixed.md
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Description: Zero PE's imputed Medicare Part B premiums (medical_expense_health_insurance_premiums) so they don't inflate state medical exemptions/deductions, restoring TAXSIM/TaxAct parity for elderly itemizers (MA, OK, OH).
10 changes: 10 additions & 0 deletions policyengine_taxsim/core/input_mapper.py
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Expand Up @@ -225,6 +225,16 @@ def form_household_situation(year, state, taxsim_vars):
"commodity_supplemental_food_program"
] = {str(year): 0}

# Explicitly set imputed medical expenses to 0 for all people. TAXSIM has no
# medical-expense input, so PE's imputed Medicare Part B premiums would
# otherwise flow through the federal itemized medical deduction into state
# medical exemptions/deductions (e.g. MA Schedule Y, OK Schedule 511-D, OH),
# understating state tax relative to TAXSIM/TaxAct.
for person_name in household_situation["people"]:
household_situation["people"][person_name][
"medical_expense_health_insurance_premiums"
] = {str(year): 0}

# Explicitly set SNAP to 0 for all SPM units to prevent PolicyEngine from imputing SNAP benefits
# TAXSIM does not model SNAP, so we need to ensure it's not automatically calculated
for spm_unit_name in household_situation["spm_units"]:
Expand Down
6 changes: 6 additions & 0 deletions policyengine_taxsim/core/yaml_generator.py
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Expand Up @@ -170,6 +170,12 @@ def generate_yaml(
"commodity_supplemental_food_program": person_data.get(
"commodity_supplemental_food_program", {}
).get(year_str, 0),
# TAXSIM has no medical-expense input; zero PE's imputed Medicare
# Part B premiums so they don't flow into state medical
# exemptions/deductions via the federal itemized medical deduction.
"medical_expense_health_insurance_premiums": person_data.get(
"medical_expense_health_insurance_premiums", {}
).get(year_str, 0),
}

# Add optional fields only if they have non-zero values
Expand Down
4 changes: 4 additions & 0 deletions policyengine_taxsim/runners/policyengine_runner.py
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Expand Up @@ -167,6 +167,7 @@ def _initialize_dataset_structure(self) -> dict:
"head_start", # Head Start should be 0 to match TAXSIM (which doesn't model Head Start)
"early_head_start", # Early Head Start should be 0 to match TAXSIM (which doesn't model Early Head Start)
"commodity_supplemental_food_program", # Commodity supplemental food program should be 0 to match TAXSIM (which doesn't model this program)
"medical_expense_health_insurance_premiums", # TAXSIM has no medical-expense input; zero PE's imputed Medicare Part B premiums so they don't flow into state medical exemptions/deductions via the federal itemized medical deduction
}

# Combine all variables
Expand Down Expand Up @@ -837,6 +838,9 @@ def generate(self) -> None:
data["commodity_supplemental_food_program"][year_int] = np.zeros(
total_people_for_year
) # Set commodity supplemental food program to 0 to match TAXSIM (which doesn't model this program)
data["medical_expense_health_insurance_premiums"][year_int] = np.zeros(
total_people_for_year
) # TAXSIM has no medical-expense input; zero PE's imputed Medicare Part B premiums so they don't flow into state medical exemptions/deductions via the federal itemized medical deduction

# Household data
data["household_id"][year_int] = year_household_ids
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14 changes: 14 additions & 0 deletions tests/test_mappers.py
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Expand Up @@ -94,6 +94,7 @@ def test_import_single_household(sample_taxsim_input):
"head_start": {"2021": 0},
"early_head_start": {"2021": 0},
"commodity_supplemental_food_program": {"2021": 0},
"medical_expense_health_insurance_premiums": {"2021": 0},
}
},
"spm_units": {
Expand Down Expand Up @@ -128,6 +129,7 @@ def test_import_single_household_without_state(sample_taxsim_input_without_state
"head_start": {"2021": 0},
"early_head_start": {"2021": 0},
"commodity_supplemental_food_program": {"2021": 0},
"medical_expense_health_insurance_premiums": {"2021": 0},
}
},
"spm_units": {
Expand Down Expand Up @@ -162,6 +164,7 @@ def test_import_single_household_with_state_eq_0(sample_taxsim_input_with_state_
"head_start": {"2021": 0},
"early_head_start": {"2021": 0},
"commodity_supplemental_food_program": {"2021": 0},
"medical_expense_health_insurance_premiums": {"2021": 0},
}
},
"spm_units": {
Expand Down Expand Up @@ -250,6 +253,7 @@ def test_joint_household(sample_taxsim_input_for_joint):
"head_start": {"2023": 0},
"early_head_start": {"2023": 0},
"commodity_supplemental_food_program": {"2023": 0},
"medical_expense_health_insurance_premiums": {"2023": 0},
},
"your partner": {
"age": {"2023": 40},
Expand All @@ -259,6 +263,7 @@ def test_joint_household(sample_taxsim_input_for_joint):
"head_start": {"2023": 0},
"early_head_start": {"2023": 0},
"commodity_supplemental_food_program": {"2023": 0},
"medical_expense_health_insurance_premiums": {"2023": 0},
},
"your first dependent": {
"age": {"2023": 10},
Expand All @@ -270,6 +275,7 @@ def test_joint_household(sample_taxsim_input_for_joint):
"head_start": {"2023": 0},
"early_head_start": {"2023": 0},
"commodity_supplemental_food_program": {"2023": 0},
"medical_expense_health_insurance_premiums": {"2023": 0},
},
"your second dependent": {
"age": {"2023": 10},
Expand All @@ -281,6 +287,7 @@ def test_joint_household(sample_taxsim_input_for_joint):
"head_start": {"2023": 0},
"early_head_start": {"2023": 0},
"commodity_supplemental_food_program": {"2023": 0},
"medical_expense_health_insurance_premiums": {"2023": 0},
},
},
"spm_units": {
Expand Down Expand Up @@ -356,6 +363,7 @@ def test_household_with_dependent(sample_taxsim_input_for_household_with_depende
"head_start": {"2023": 0},
"early_head_start": {"2023": 0},
"commodity_supplemental_food_program": {"2023": 0},
"medical_expense_health_insurance_premiums": {"2023": 0},
},
"your partner": {
"age": {"2023": 40},
Expand All @@ -365,6 +373,7 @@ def test_household_with_dependent(sample_taxsim_input_for_household_with_depende
"head_start": {"2023": 0},
"early_head_start": {"2023": 0},
"commodity_supplemental_food_program": {"2023": 0},
"medical_expense_health_insurance_premiums": {"2023": 0},
},
"your first dependent": {
"age": {"2023": 4},
Expand All @@ -376,6 +385,7 @@ def test_household_with_dependent(sample_taxsim_input_for_household_with_depende
"head_start": {"2023": 0},
"early_head_start": {"2023": 0},
"commodity_supplemental_food_program": {"2023": 0},
"medical_expense_health_insurance_premiums": {"2023": 0},
},
"your second dependent": {
"age": {"2023": 10},
Expand All @@ -387,6 +397,7 @@ def test_household_with_dependent(sample_taxsim_input_for_household_with_depende
"head_start": {"2023": 0},
"early_head_start": {"2023": 0},
"commodity_supplemental_food_program": {"2023": 0},
"medical_expense_health_insurance_premiums": {"2023": 0},
},
},
"spm_units": {
Expand Down Expand Up @@ -455,6 +466,7 @@ def test_household_with_dependent_single_parent(
"head_start": {"2023": 0},
"early_head_start": {"2023": 0},
"commodity_supplemental_food_program": {"2023": 0},
"medical_expense_health_insurance_premiums": {"2023": 0},
},
"your first dependent": {
"age": {"2023": 4},
Expand All @@ -466,6 +478,7 @@ def test_household_with_dependent_single_parent(
"head_start": {"2023": 0},
"early_head_start": {"2023": 0},
"commodity_supplemental_food_program": {"2023": 0},
"medical_expense_health_insurance_premiums": {"2023": 0},
},
"your second dependent": {
"age": {"2023": 10},
Expand All @@ -477,6 +490,7 @@ def test_household_with_dependent_single_parent(
"head_start": {"2023": 0},
"early_head_start": {"2023": 0},
"commodity_supplemental_food_program": {"2023": 0},
"medical_expense_health_insurance_premiums": {"2023": 0},
},
},
"spm_units": {
Expand Down
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