Fix Maine EITC childless age expansion (#8927) and 2025 STFC base (#8928); close #8710, #8589 with evidence

[MaxGhenis]

Summary

Accuracy-fix lane covering four issues. Two need code changes (Maine EITC #8927, Maine STFC #8928) and are fixed here with page-anchored citations and tests including the reported households. Two are already correct on main and are documented with reproductions for closing.

Issue	State	Verdict
#8927	ME	Fixed — childless EITC age expansion (18-24) added
#8928	ME	Fixed — 2025 STFC base corrected to $215
#8710	DE	Already fixed on main by #7940 — close with evidence
#8589	PA	Already fixed on main by #8922 — close with evidence

Draft — lead reviews before merge/ready/close.

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#8927 — Maine EITC omits the §5219-S childless age expansion (FIXED)

Law. 36 M.R.S. § 5219-S:

• sub-§6 (verbatim): "'eligible individual' has the same meaning as under Section 32(c)(1) of the Code except that 'eligible individual' also includes an individual who does not have a qualifying child for the taxable year, who is at least 18 years of age and has not attained 25 years of age before the close of the taxable year and who also meets the qualifications under Section 32(c)(1)(A)(ii)(I) and (III) of the Code."
• sub-§5 (verbatim): "The credit for an eligible individual who is entitled to a credit under subsections 1 to 3-A, has not attained 25 years of age and does not have a qualifying child for the taxable year must be calculated in the same manner as it would be calculated if that individual were eligible for a federal earned income credit."
• Section history: sub-§5/§6 added by PL 2019 c. 527 Pt. B, applying to tax years beginning on or after January 1, 2020.

Bug. me_eitc returned eitc * match_rate, and eitc is the actual federal credit — which is $0 for childless filers under the federal age floor (25 in 2022+). So a childless Maine filer aged 18-24 received $0 instead of 50% of a pro forma federal EIC.

Fix. New me_childless_eitc_age_eligible (childless tax unit with head/spouse aged 18 up to the federal minimum childless age) and me_pro_forma_childless_eitc (federal phase-in/reduction with the age gate dropped, retaining the § 32 investment-income and SSN tests, mirroring Maryland's federal_eitc_without_age_minimum). me_eitc now applies the match rate to max(eitc, me_pro_forma_childless_eitc). Maine lowers only the age floor; the federal childless maximum age (64) is preserved, so 65+ childless filers still get $0.

Reproduction (2025, ME, MFJ, ages 23/24, no dependents, $10,476 wages; from PolicyEngine/policyengine-taxsim#1056):

• Before: eitc = 0, me_eitc = 0
• After: pro forma childless EIC = $649 → me_eitc = $324.50 (TaxAct return shows $325 on Form 1040ME)

Fixes #8927.

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#8928 — Maine STFC 2025 base amount is $220, form shows $215 (FIXED)

Source. 2025 Schedule PTFC/STFC, line 17 table, page 4. Lowest income band:

Filing status	0 dep	1 dep	2+ dep
MFJ / QSS (≤ $50,950)	215	250	280
Head of household (≤ $38,200), cols 0-1 / 2 / 3+	215	250	280
Single (≤ $25,450)	155	—	—

The model had a 2025 base of $220 for joint/HoH/surviving-spouse (single $155 was correct). It matched the form for filers with dependents ($220 + $30 = $250, $220 + $60 = $280) but overstated the 0-dependent credit by $5. The 2+-dependent integration test from #8266 was insensitive to the base/add-on split, so the error passed.

Fix. Set the 2025 joint/HoH/surviving-spouse base to $215 and re-split the 2025 dependent add-ons to $35/$65 (from $30/$60), keeping the with-dependent totals at $250/$280. Adjacent years verified against their forms and left unchanged: 2023 = $200 (2023 form), 2024 = $210 (2024 form). Also corrected the 2024 reference links (they pointed at the 2023 file). Added 0-dependent pin tests (joint/HoH/surviving-spouse) plus a 2024 control.

Reproduction (2025, ME, MFJ, no dependents, low income): me_sales_tax_fairness_credit = 220.00 before, 215.00 after (matches form).

Fixes #8928.

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#8710 — DE separate/combined non-refundable credit cap (ALREADY FIXED — recommend close)

Reported cause: non-refundable credits capped against combined tax instead of per-column. This was fixed on main by #7940 ("Fix DE Filing Status 4 per-column credit allocation", merged 2026-07-05, closing the sister issue #7931), which rewired the separate path so de_income_tax_before_refundable_credits_separate applies per-column credits in de_income_tax_after_non_refundable_credits_indv (PIT-RES Line 32 ≤ Line 26 per column). The draft PR #8726 that targeted this issue is now closed.

Reproduction of the issue's household on current main (DE, MFJ, both age 20, 1 dependent, $21,790 interest split 50/50, separate/combined): de_income_tax = $59.16 (was the reported $8.33). Column B's $220 personal credit is correctly capped at its own $169.16 tax; the surplus does not offset Column A. Form/TAXSIM ground truth is $58; the ~$1.16 residual is PolicyEngine's continuous rate-bracket computation vs the form's rounded tax table, unrelated to the credit-pooling bug. Every DE non-refundable credit (de_personal_credit, de_aged_personal_credit, de_cdcc, de_non_refundable_eitc) was audited: none cross-offsets between columns on the separate path.

Added the reported household as a regression test. Recommend closing #8710 with reference to #7940.

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#8589 — PA over-charges qualified retirement income for retirees (ALREADY FIXED — recommend close)

Reported cause: PA taxes pension/IRA/401(k) distributions for past-retirement-age retirees. This was fixed on main by #8922 (merged 2026-07-06), which added pa_nontaxable_retirement_distributions covering IRA/401(k)/403(b)/SEP/Keogh under 61 Pa. Code § 101.6. The issue's household also includes taxable_pension_income (handled by the pre-existing pa_nontaxable_pension_income) and Social Security (handled by tax_exempt_social_security), so all four income components are exempt.

Reproduction of the issue's exact household on current main (2026, PA, MFJ, ages 67/65, $60k pensions + $30k IRA + $50k SS): state_income_tax = $0.00 (expected $0.00). The pre-retirement gating still works: a 401(k) or pension distribution at age 50 is taxed ($614 on $20k), at age 67 is exempt ($0) — no source type is missed.

Added the reported household as a regression test. Recommend closing #8589 with reference to #8922.

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Tests

All baseline trees pass on this branch (local policyengine-core test):

• ME: 568 (was 550; +18 for the EITC expansion and STFC base pins)
• DE: 319 (was 318; +1 DE separate/combined return: non-refundable credits capped against combined tax instead of each spouse's own tax #8710 reported-household regression)
• PA: 361 (was 360; +1 Pennsylvania state tax over-charges qualified retirement income for retirees #8589 reported-household regression)

policyengine-core test policyengine_us/tests/policy/baseline/gov/states/{me,de,pa}/ -c policyengine_us

🤖 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 (0265d3c).
⚠️ Report is 149 commits behind head on main.

Additional details and impacted files

@@            Coverage Diff            @@
##              main     #8932   +/-   ##
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  Coverage   100.00%   100.00%           
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  Files            3         3           
  Lines           55        48    -7     
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- Hits            55        48    -7     

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