Add Indiana SB 243 OBBBA tax conformity (tips, overtime, car loan interest)

changelog.d/in-sb243-obbba-conformity.added.md

@@ -0,0 +1 @@
+Indiana SB 243 OBBBA tax conformity: tip income, overtime income, and auto loan interest deductions for tax year 2026.

policyengine_us/parameters/gov/states/in/tax/income/deductions/deductions.yaml

@@ -5,7 +5,7 @@ values:
     - in_homeowners_property_tax_deduction
     - salt_refund_last_year
     - us_govt_interest
-    - tax_unit_taxable_social_security # includes railroad retirement benefits
+    - tax_unit_taxable_social_security  # includes railroad retirement benefits
     - in_military_service_deduction
     - in_nonpublic_school_deduction
     - in_nol
@@ -36,7 +36,65 @@ values:
     # IC 6-3-2-4 (b)
     - military_basic_pay
 
-2024-01-01:
+  2024-01-01:
+    # IC 6-3-2-6
+    - in_renters_deduction
+    # IC 6-1.1
+    - in_homeowners_property_tax_deduction
+    # IC 6-3.1-19-1
+    - salt_refund_last_year
+    # IC 6-8-5-1
+    - us_govt_interest
+    # US Code 26-A-1-B-II-§86
+    - tax_unit_taxable_social_security  # includes railroad retirement benefits
+    # IC 6-3-2-4-(a)(1)
+    - in_military_service_deduction
+    # IC 6-3-2-22-(d)(1)
+    - in_nonpublic_school_deduction
+    # IC 6-3-2-2.5
+    - in_nol
+    # IC 6-3-2-10
+    - in_unemployment_compensation_deduction
+    # IC 6-3-2
+    - in_other_deductions
+    # IC 6-3-2-4 (b)
+    - military_basic_pay
+    # IC 6-3-2-28
+    - in_healthcare_sharing_deduction
+
+  2026-01-01:
+    # IC 6-3-2-6
+    - in_renters_deduction
+    # IC 6-1.1
+    - in_homeowners_property_tax_deduction
+    # IC 6-3.1-19-1
+    - salt_refund_last_year
+    # IC 6-8-5-1
+    - us_govt_interest
+    # US Code 26-A-1-B-II-§86
+    - tax_unit_taxable_social_security  # includes railroad retirement benefits
+    # IC 6-3-2-4-(a)(1)
+    - in_military_service_deduction
+    # IC 6-3-2-22-(d)(1)
+    - in_nonpublic_school_deduction
+    # IC 6-3-2-2.5
+    - in_nol
+    # IC 6-3-2-10
+    - in_unemployment_compensation_deduction
+    # IC 6-3-2
+    - in_other_deductions
+    # IC 6-3-2-4 (b)
+    - military_basic_pay
+    # IC 6-3-2-28
+    - in_healthcare_sharing_deduction
+    # IC 6-3-2-31 (SB 243 OBBBA conformity - 2026 only)
+    - in_tip_income_deduction
+    # IC 6-3-2-32 (SB 243 OBBBA conformity - 2026 only)
+    - in_overtime_income_deduction
+    # IC 6-3-2-33 (SB 243 OBBBA conformity - 2026 only)
+    - in_auto_loan_interest_deduction
+
+  2027-01-01:
     # IC 6-3-2-6
     - in_renters_deduction
     # IC 6-1.1
@@ -59,12 +117,12 @@ values:
     - in_other_deductions
     # IC 6-3-2-4 (b)
     - military_basic_pay
-    # IC 6-3-2-28
+    # IC 6-3-2-28
     - in_healthcare_sharing_deduction
 
-metadata: 
+metadata:
   unit: list
-  Period: year
+  period: year
   label: Indiana Deductions
   reference:
     - title: Indiana General Assembly Legal Code Title 6 Taxation

policyengine_us/tests/policy/baseline/gov/states/in/tax/income/deductions/obbba_conformity/in_auto_loan_interest_deduction.yaml

@@ -0,0 +1,48 @@
+- name: Indiana auto loan interest deduction in 2026
+  period: 2026
+  input:
+    state_code: IN
+    auto_loan_interest: 2_000
+    employment_income: 50_000
+  output:
+    in_auto_loan_interest_deduction: 2_000
+
+- name: Indiana auto loan interest deduction zero with no interest
+  period: 2026
+  input:
+    state_code: IN
+    auto_loan_interest: 0
+    employment_income: 50_000
+  output:
+    in_auto_loan_interest_deduction: 0
+
+- name: Indiana auto loan interest deduction not in in_deductions before 2026
+  period: 2025
+  input:
+    state_code: IN
+    auto_loan_interest: 2_000
+    employment_income: 50_000
+  output:
+    in_auto_loan_interest_deduction: 2_000
+    in_deductions: 0
+
+- name: Indiana auto loan interest deduction in in_deductions in 2026
+  period: 2026
+  absolute_error_margin: 1
+  input:
+    state_code: IN
+    auto_loan_interest: 2_000
+    employment_income: 50_000
+  output:
+    in_auto_loan_interest_deduction: 2_000
+    in_deductions: 2_000
+
+- name: Indiana auto loan interest deduction not in in_deductions after 2026 (sunset)
+  period: 2027
+  input:
+    state_code: IN
+    auto_loan_interest: 2_000
+    employment_income: 50_000
+  output:
+    in_auto_loan_interest_deduction: 2_000
+    in_deductions: 0

policyengine_us/tests/policy/baseline/gov/states/in/tax/income/deductions/obbba_conformity/in_overtime_income_deduction.yaml

@@ -0,0 +1,48 @@
+- name: Indiana overtime income deduction in 2026 with overtime
+  period: 2026
+  input:
+    state_code: IN
+    fsla_overtime_premium: 5_000
+    employment_income: 50_000
+  output:
+    in_overtime_income_deduction: 5_000
+
+- name: Indiana overtime income deduction zero with no overtime
+  period: 2026
+  input:
+    state_code: IN
+    fsla_overtime_premium: 0
+    employment_income: 50_000
+  output:
+    in_overtime_income_deduction: 0
+
+- name: Indiana overtime deduction not in in_deductions before 2026
+  period: 2025
+  input:
+    state_code: IN
+    fsla_overtime_premium: 5_000
+    employment_income: 50_000
+  output:
+    in_overtime_income_deduction: 5_000
+    in_deductions: 0
+
+- name: Indiana overtime deduction in in_deductions in 2026
+  period: 2026
+  absolute_error_margin: 1
+  input:
+    state_code: IN
+    fsla_overtime_premium: 5_000
+    employment_income: 50_000
+  output:
+    in_overtime_income_deduction: 5_000
+    in_deductions: 5_000
+
+- name: Indiana overtime deduction not in in_deductions after 2026 (sunset)
+  period: 2027
+  input:
+    state_code: IN
+    fsla_overtime_premium: 5_000
+    employment_income: 50_000
+  output:
+    in_overtime_income_deduction: 5_000
+    in_deductions: 0

policyengine_us/tests/policy/baseline/gov/states/in/tax/income/deductions/obbba_conformity/in_tip_income_deduction.yaml

@@ -0,0 +1,48 @@
+- name: Indiana tip income deduction in 2026 with tips
+  period: 2026
+  input:
+    state_code: IN
+    tip_income: 10_000
+    employment_income: 50_000
+  output:
+    in_tip_income_deduction: 10_000
+
+- name: Indiana tip income deduction zero with no tips
+  period: 2026
+  input:
+    state_code: IN
+    tip_income: 0
+    employment_income: 50_000
+  output:
+    in_tip_income_deduction: 0
+
+- name: Indiana tip income deduction not in in_deductions before 2026
+  period: 2025
+  input:
+    state_code: IN
+    tip_income: 10_000
+    employment_income: 50_000
+  output:
+    in_tip_income_deduction: 10_000
+    in_deductions: 0
+
+- name: Integration - OBBBA deductions flow through in_deductions in 2026
+  period: 2026
+  absolute_error_margin: 1
+  input:
+    state_code: IN
+    tip_income: 5_000
+    employment_income: 50_000
+  output:
+    in_tip_income_deduction: 5_000
+    in_deductions: 5_000
+
+- name: Indiana tip income deduction not in in_deductions after 2026 (sunset)
+  period: 2027
+  input:
+    state_code: IN
+    tip_income: 10_000
+    employment_income: 50_000
+  output:
+    in_tip_income_deduction: 10_000
+    in_deductions: 0

policyengine_us/variables/gov/states/in/tax/income/deductions/obbba_conformity/in_auto_loan_interest_deduction.py

@@ -0,0 +1,15 @@
+from policyengine_us.model_api import *
+
+
+class in_auto_loan_interest_deduction(Variable):
+    value_type = float
+    entity = TaxUnit
+    label = "Indiana auto loan interest deduction"
+    unit = USD
+    definition_period = YEAR
+    reference = (
+        "https://iga.in.gov/pdf-documents/124/2026/senate/bills/SB0243/SB0243.05.ENRH.pdf#page=52",
+        "https://iga.in.gov/legislative/2026/bills/senate/243",
+    )
+    defined_for = StateCode.IN
+    adds = ["auto_loan_interest_deduction"]

policyengine_us/variables/gov/states/in/tax/income/deductions/obbba_conformity/in_overtime_income_deduction.py

@@ -0,0 +1,15 @@
+from policyengine_us.model_api import *
+
+
+class in_overtime_income_deduction(Variable):
+    value_type = float
+    entity = TaxUnit
+    label = "Indiana overtime income deduction"
+    unit = USD
+    definition_period = YEAR
+    reference = (
+        "https://iga.in.gov/pdf-documents/124/2026/senate/bills/SB0243/SB0243.05.ENRH.pdf#page=52",
+        "https://iga.in.gov/legislative/2026/bills/senate/243",
+    )
+    defined_for = StateCode.IN
+    adds = ["overtime_income_deduction"]

policyengine_us/variables/gov/states/in/tax/income/deductions/obbba_conformity/in_tip_income_deduction.py

@@ -0,0 +1,15 @@
+from policyengine_us.model_api import *
+
+
+class in_tip_income_deduction(Variable):
+    value_type = float
+    entity = TaxUnit
+    label = "Indiana tip income deduction"
+    unit = USD
+    definition_period = YEAR
+    reference = (
+        "https://iga.in.gov/pdf-documents/124/2026/senate/bills/SB0243/SB0243.05.ENRH.pdf#page=51",
+        "https://iga.in.gov/legislative/2026/bills/senate/243",
+    )
+    defined_for = StateCode.IN
+    adds = ["tip_income_deduction"]