Exclude state income tax from federal SALT under --disable-salt#997
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PavelMakarchuk wants to merge 1 commit into
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Exclude state income tax from federal SALT under --disable-salt#997PavelMakarchuk wants to merge 1 commit into
PavelMakarchuk wants to merge 1 commit into
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TAXSIM-35 deducts mortgage interest and property tax on the federal return but does not deduct state income tax. Verified against the taxsimtest binary across states and years (e.g. NY single $84K wages + $37K mortgage -> federal itemized $37,000, with the state tax excluded). The prior three-pass --disable-salt re-introduced the computed state tax as a fixed federal SALT input (Pass B), which overshot TAXSIM by the full state-tax amount on every itemizing record. Replace it with a single SALT-disabled pass that zeros state_and_local_sales_or_income_tax for both the state and federal computation (property tax via real_estate_taxes still flows through). On a 60-record itemizing sample (10 states x 3 incomes x 2 property-tax levels) this cuts the mean federal fiitax mismatch vs the binary from ~$1,185 (0/60 within $15) to $0 (60/60 exact). taxsim #971 (CA joint, $164K interest + $50K mortgage) now returns fiitax $14,921.55, matching the binary. State-side outputs are unchanged (the pass already computed state tax with SALT zeroed). Updates the disable-salt test to assert the federal itemized excludes state income tax. Co-Authored-By: Claude Opus 4.8 (1M context) <noreply@anthropic.com>
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Problem
TAXSIM-35 deducts mortgage interest and property tax on the federal return but not state income tax. Verified against the
taxsimtestbinary across states and years:But the prior three-pass
--disable-saltre-introduced the computed state tax as a fixed federal SALT input (Pass B), overshooting TAXSIM by the full state-tax amount on every itemizing record. Surfaced by #971.Fix
Replace the three-pass with a single SALT-disabled pass: zero
state_and_local_sales_or_income_taxfor both the state and federal computation, so federal Schedule A excludes state income/sales tax. Property tax (real_estate_taxes) still flows through.Verification (vs
taxsimtestbinary)60-record itemizing sample (10 states × 3 incomes × 2 property-tax levels):
siitaxunchanged (the pass already computed state tax with SALT zeroed)Updates the disable-salt test to assert the federal itemized excludes state income tax. Full suite: 142 passed.
Closes #971
🤖 Generated with Claude Code