Fix Vermont CDCC: TY2022 AGI cap, low-income credit sunset, and pre-2022 24% nonrefundable credit

[hua7450]

Summary

Fixes the three Vermont CDCC divergences confirmed by verbatim reading of the enacted acts (#8879, part of the #8826 state CDCC verification). All three are grounded in the act texts quoted below.

Closes #8879

Regulatory basis

2022 Act 138, Sec. 3 amended 32 V.S.A. § 5828c for TY2022 to read:

"LOW-INCOME CHILD AND DEPENDENT CARE CREDIT — A resident of this State with federal adjusted gross income less than $30,000.00 (or $40,000.00 for married, filing jointly) shall be eligible for a refundable credit… equal to 50 72 percent of the federal child and dependent care credit… provided in this State in a registered home or licensed facility certified by the Agency of Human Services…"

2023 Act 72, Sec. 14 (eff. Jan 1, 2023) rewrote § 5828c without the AGI cap, the certified-facility requirement, or the "low-income" title — matching the current statute.

2022 Act 138, Sec. 2 struck "child care and dependent care credits" from old § 5822(d)(1): "A taxpayer shall be entitled to a credit… of 24 percent of each of the credits allowed against the taxpayer's federal income tax… and child care and dependent care credits." (2021 codified text)

Changes

1. TY2022 AGI cap on vt_cdcc. New income_limit_in_effect boolean (true 2022, false 2023+) gates the 72% credit on the existing vt_low_income_cdcc_eligible AGI test ($30,000, or $40,000 joint — thresholds unchanged from the prior low-income credit). Previously the model paid 72% to all filers from 2022, over-granting above-threshold TY2022 filers.
2. Sunset the 50% low-income credit after 2021 (low_income/rate.yaml → 0 at 2022-01-01) and remove vt_low_income_cdcc from the 2022+ state_cdccs.yaml entries, which double-listed both Vermont credits in the taxsim_state_cdcc aggregate (0.72 + 0.5 × federal for a low-income filer). Tax liability was unaffected (the refundable-credits list was already year-exclusive); the aggregate was not.
3. New vt_nonrefundable_cdcc (§ 5822(d)(1)): 24% of the capped federal credit through 2021, ending 2022 per Act 138 Sec. 2. Low-income-eligible filers are excluded — § 5828c is claimed "in lieu of" the 5822(d) credit, and its 50% refundable match always dominates 24% nonrefundable. Registered in non_refundable.yaml (2021 entry; new 2022 entry drops it) and in the pre-2022 state_cdccs.yaml blocks. Mirrors the sibling vt_elderly_or_disabled_credit, the other modeled leg of the same § 5822(d)(1) match. Previously an above-threshold pre-2022 filer received $0 where law gave 24%.
4. Also adds a 2021-01-01: 0 entry to the 72% rate so pre-2022 queries don't back-extrapolate it, fixes vt_cdcc.py's reference tuple (three URLs were concatenated into one string), and adds missing period: metadata to the touched parameter files.

Not modeled (by design)

What	Source	Why
Certified-facility requirement (pre-2023 § 5828c; pre-2022 § 5822(d) had none)	Act 138 Sec. 3	We don't track provider certification at the moment; noted in code comments
In-state-care requirement	§ 5828c	We don't track where care is provided at the moment

Flagged for review: the 24% § 5822(d)(1) rate is verified for 2021 via Act 138's before-text; continuity back to 2005 (the low-income parameters' start) is assumed and noted in the parameter comment.

Reproductions

Scenario	Before	After
TY2022, AGI $50,000, $1,000 federal CDCC	$720	$0
TY2022, joint, AGI $40,000 (at threshold)	$720	$720
TY2023, AGI $50,000	$720	$720 (cap removed)
TY2021, AGI $50,000 (above low-income threshold)	$0	$240 nonrefundable
TY2021, AGI $20,000	$500 low-income credit	$500 (unchanged; still in lieu of the 24%)
Low-income filer's state-CDCC aggregate, TY2022+	0.72 + 0.5 × federal	0.72 × federal

Tests

Seven new/appended cases covering every row above plus the vt_non_refundable_credits pickup. Full VT income tax tree passes locally: 168 tests.

Independent of #8855/#8878 — no shared files.

🤖 Generated with Claude Code

[codecov]

Codecov Report

✅ All modified and coverable lines are covered by tests.
✅ Project coverage is 100.00%. Comparing base (f9e58e7) to head (2c822b5).
⚠️ Report is 118 commits behind head on main.

Additional details and impacted files

@@            Coverage Diff            @@
##              main     #8884   +/-   ##
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  Coverage   100.00%   100.00%           
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  Files            3         2    -1     
  Lines           55        30   -25     
  Branches         0         1    +1     
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- Hits            55        30   -25     

Flag	Coverage Δ
unittests	100.00% <100.00%> (ø)

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[MaxGhenis]

Completion review (rebased onto main, statute-verified, tests green)

Rebased onto main at c2efd5a0 (clean, no conflicts; MERGEABLE). Reverted the stray uv.lock self-version bump so the PR carries only the changelog fragment (CI regenerates the version on merge).

Statutory verification against primary sources

Read the enacted 2022 Act 138 PDF verbatim and cross-checked the current codified statute:

• § 5822(d)(1) — 24% nonrefundable, pre-2022: Act 138 Sec. 2 (as-enacted text) reads "a credit… of 24 percent of each of the credits allowed against the taxpayer's federal income tax… and child care and dependent care credits." The current 32 V.S.A. § 5822(d)(1) omits "and child care and dependent care credits" (retaining only elderly/disabled + investment), confirming Act 138 struck the CDCC leg effective 2022. ✅ 24% rate and TY2021 sunset both confirmed.
• § 5828c — TY2022 low-income cap + 72%: Act 138 Sec. 3 (verbatim): "A resident… with federal adjusted gross income less than $30,000.00 (or $40,000.00 for married, filing jointly) shall be eligible for a refundable credit… equal to 50 72 percent of the federal child and dependent care credit… provided in this State in a registered home or licensed facility certified by the Agency of Human Services…" ✅ AGI thresholds, 72% (was 50%), refundable, certified-facility requirement all confirmed.
• 2023 cap removal (Act 72 Sec. 14): The current § 5828c is titled "Child and dependent care credit" (no "Low-income"), has no AGI cap and no facility requirement — "equal to 72 percent of the federal child and dependent care credit… for child or dependent care services." ✅ Confirms income_limit_in_effect: false from 2023.

Tests

• Full VT income-tax tree: 170 passed
• VT CDCC directory (incl. new vt_nonrefundable_cdcc.yaml, vt_cdcc.yaml TY2022/2023 cases): 16 passed
• Federal gov/irs/credits/cdcc tree: 74 passed

New tests encode every reproduction-table row (TY2022 $50k→$0, TY2022 JOINT $40k→$720, TY2023 $50k→$720, TY2021 $50k→$240 nonrefundable, TY2021 $20k→$500 low-income-in-lieu, TY2022 nonrefundable→$0).

Independent of #8855/#8878/#8885 — no shared files.

Verdict: complete and statute-faithful. Ready to undraft once CI is green (all substantive suites already passing at time of writing).

(Reviewed and rebased by Claude Fable on Max's behalf.)

[MaxGhenis]

Fable review + agent verification: all three VT claims verified verbatim against enacted 2022 Act 138 and the current codified statute — §5822(d)(1) 24% nonrefundable credit through TY2021, §5828c TY2022 $30k/$40k AGI cap at 72% refundable with the certified-facility requirement, and the 2023 Act 72 removal. VT tree 170 + CDCC 74 tests green; the one red was the runner-killed shard, rerun clean.