Maryland Child Tax Credit

Maryland’s Child Tax Credit provides up to \(500 for each child with a qualified disability in a family with less than \)6,000 in federal adjusted gross income.

Examples

Consider a set of Maryland households whose income is solely from earnings.

from policyengine_us import IndividualSim
import pandas as pd
import plotly.express as px


def make(adults, children):
    sim = IndividualSim(year=2022)
    sim.add_person(name="head", age=25, is_tax_unit_head=True)
    members = ["head"]
    if adults > 1:
        sim.add_person(name="spouse", is_tax_unit_head=False)
        members += ["spouse"]
    for i in range(children):
        child = "child{}".format(i)
        sim.add_person(name=child, age=5, is_disabled=True)
        members += [child]
    sim.add_tax_unit(
        name="tax_unit",
        members=members,
    )
    sim.add_spm_unit(name="spm_unit", members=members)
    sim.add_household(name="household", members=members, state_code="MD")
    sim.vary("employment_income", max=100_000, step=100)
    return pd.DataFrame(
        dict(
            employment_income=sim.calc("employment_income")[0],
            ctc=sim.calc("md_ctc")[0].round(),
            ctc_mtr=-sim.deriv(
                "md_ctc",
                "employment_income",
                wrt_target="head",
            ),
            adults=adults,
            children=children,
        )
    )


l = []
for adults in range(1, 3):
    for children in range(0, 5):
        l.append(make(adults, children))

df = pd.concat(l)

LABELS = dict(
    employment_income="Employment income",
    ctc="MD Child Tax Credit",
    ctc_mtr="MD Child Tax Credit marginal tax rate",
    adults="Adults",
    children="Children",
)

fig = px.line(
    df,
    "employment_income",
    "ctc",
    color="children",
    animation_frame="adults",
    labels=LABELS,
    title="Maryland Child Tax Credit",
)
fig.update_layout(
    xaxis_tickformat="$,",
    yaxis_tickformat="$,",
    yaxis_range=[0, df.ctc.max() * 1.05],
)
fig.show()

The Maryland Child Tax Credit is a flat amount for each eligible child. There is no phase out of the credit, and the amount of the credit falls to zero for households with income above $6,000.

Budgetary impact

PolicyEngine US does not yet impute the number of children with disabilities in a household, so the budgetary impact is not yet known.

from policyengine_us import Microsimulation

sim = Microsimulation(dataset_year=2020)

sim.calc("md_ctc", period=2022).sum() / 1e6

---------------------------------------------------------------------------
TypeError                                 Traceback (most recent call last)
Cell In[2], line 3
      1 from policyengine_us import Microsimulation
----> 3 sim = Microsimulation(dataset_year=2020)
      5 sim.calc("md_ctc", period=2022).sum() / 1e6

File ~/work/policyengine-us/policyengine-us/policyengine_us/system.py:115, in Microsimulation.__init__(self, *args, **kwargs)
    114 def __init__(self, *args, **kwargs):
--> 115     super().__init__(*args, **kwargs)
    117     reform = create_structural_reforms_from_parameters(
    118         self.tax_benefit_system.parameters, year_start
    119     )
    120     if reform is not None:

TypeError: __init__() got an unexpected keyword argument 'dataset_year'