Create reform to CDCTC that would make families eligible if at least one parent works

changelog_entry.yaml

@@ -0,0 +1,4 @@
+- bump: minor
+  changes:
+    added:
+      - CDCTC reform that makes families eligible if at least one parent works (instead of requiring both parents to work)

policyengine_us/parameters/gov/contrib/cdcc/single_parent_work_requirement/in_effect.yaml

@@ -0,0 +1,8 @@
+description: The CDCTC single parent work requirement reform is in effect.
+metadata:
+  unit: bool
+  period: year
+  label: CDCTC single parent work requirement reform in effect
+
+values:
+  0001-01-01: false

policyengine_us/reforms/cdcc/__init__.py

@@ -0,0 +1,3 @@
+from policyengine_us.reforms.cdcc.cdcc_single_parent_work_requirement import (
+    create_cdcc_single_parent_work_requirement_reform,
+)

policyengine_us/reforms/cdcc/cdcc_single_parent_work_requirement.py

@@ -0,0 +1,81 @@
+from policyengine_us.model_api import *
+from policyengine_core.periods import period as period_
+
+
+def create_cdcc_single_parent_work_requirement() -> Reform:
+    """
+    Reform that changes CDCTC eligibility to require at least one parent to work
+    instead of both parents.
+
+    Current law: For married couples, childcare expenses are capped at the
+    minimum of the two spouses' earnings, effectively requiring both to work.
+
+    This reform: Changes the cap to the maximum of the two spouses' earnings,
+    allowing families to qualify if at least one parent works.
+
+    Note: We override cdcc_relevant_expenses directly (rather than
+    min_head_spouse_earned) to avoid affecting state programs that also
+    use min_head_spouse_earned.
+    """
+
+    class cdcc_relevant_expenses(Variable):
+        value_type = float
+        entity = TaxUnit
+        label = "CDCC-relevant care expenses"
+        unit = USD
+        definition_period = YEAR
+        reference = (
+            "https://www.law.cornell.edu/uscode/text/26/21#c",
+            "https://www.law.cornell.edu/uscode/text/26/21#d_1",
+        )
+
+        def formula(tax_unit, period, parameters):
+            expenses = tax_unit("tax_unit_childcare_expenses", period)
+            cdcc_limit = tax_unit("cdcc_limit", period)
+            eligible_capped_expenses = min_(expenses, cdcc_limit)
+
+            # Reform: Use max of head/spouse earnings instead of min
+            # This allows eligibility if at least one parent works
+            is_joint = tax_unit("tax_unit_is_joint", period)
+            head_earnings = tax_unit("head_earned", period)
+            spouse_earnings = tax_unit("spouse_earned", period)
+            earnings_cap = where(
+                is_joint, max_(head_earnings, spouse_earnings), head_earnings
+            )
+
+            return min_(eligible_capped_expenses, earnings_cap)
+
+    class reform(Reform):
+        def apply(self):
+            self.update_variable(cdcc_relevant_expenses)
+
+    return reform
+
+
+def create_cdcc_single_parent_work_requirement_reform(
+    parameters, period, bypass: bool = False
+):
+    if bypass:
+        return create_cdcc_single_parent_work_requirement()
+
+    p = parameters.gov.contrib.cdcc.single_parent_work_requirement
+
+    # Check if reform is active in current period or next 5 years
+    reform_active = False
+    current_period = period_(period)
+
+    for i in range(5):
+        if p(current_period).in_effect:
+            reform_active = True
+            break
+        current_period = current_period.offset(1, "year")
+
+    if reform_active:
+        return create_cdcc_single_parent_work_requirement()
+    else:
+        return None
+
+
+cdcc_single_parent_work_requirement = (
+    create_cdcc_single_parent_work_requirement_reform(None, None, bypass=True)
+)

policyengine_us/reforms/reforms.py

@@ -132,6 +132,9 @@
     create_aca_ptc_simplified_bracket_reform,
     create_aca_ptc_700_fpl_cliff_reform,
 )
+from .cdcc import (
+    create_cdcc_single_parent_work_requirement_reform,
+)
 
 
 from policyengine_core.reforms import Reform
@@ -298,6 +301,9 @@ def create_structural_reforms_from_parameters(parameters, period):
     aca_ptc_700_fpl_cliff = create_aca_ptc_700_fpl_cliff_reform(
         parameters, period
     )
+    cdcc_single_parent_work_requirement = (
+        create_cdcc_single_parent_work_requirement_reform(parameters, period)
+    )
 
     reforms = [
         afa_reform,
@@ -358,6 +364,7 @@ def create_structural_reforms_from_parameters(parameters, period):
         aca_ptc_additional_bracket,
         aca_ptc_simplified_bracket,
         aca_ptc_700_fpl_cliff,
+        cdcc_single_parent_work_requirement,
     ]
     reforms = tuple(filter(lambda x: x is not None, reforms))
 

policyengine_us/tests/policy/reform/cdcc_single_parent_work_requirement.yaml

@@ -0,0 +1,154 @@
+# Tests for CDCTC reform that makes families eligible if at least one parent works
+# instead of requiring both parents to work
+#
+# NOTE: This reform overrides cdcc_relevant_expenses directly (not min_head_spouse_earned)
+# to avoid affecting state programs that use min_head_spouse_earned.
+
+- name: One-earner married couple gets CDCC under reform
+  period: 2024
+  reforms: policyengine_us.reforms.cdcc.cdcc_single_parent_work_requirement.cdcc_single_parent_work_requirement
+  input:
+    people:
+      adult1:
+        age: 35
+        is_tax_unit_head: true
+        employment_income: 50_000
+      adult2:
+        age: 35
+        is_tax_unit_spouse: true
+        employment_income: 0
+      child:
+        age: 5
+        is_tax_unit_dependent: true
+    tax_units:
+      tax_unit:
+        members: [adult1, adult2, child]
+        tax_unit_childcare_expenses: 5_000
+    households:
+      household:
+        members: [adult1, adult2, child]
+        state_code: CA
+  output:
+    # min_head_spouse_earned is NOT modified by this reform (unchanged from baseline)
+    min_head_spouse_earned: 0
+    # Reform calculates: min(expenses, cdcc_limit, max(head, spouse))
+    # = min($5,000, $3,000, max($50,000, $0)) = min($5,000, $3,000, $50,000) = $3,000
+    cdcc_relevant_expenses: 3_000
+
+- name: One-earner married couple - baseline would give zero
+  period: 2024
+  # No reform - baseline behavior
+  input:
+    people:
+      adult1:
+        age: 35
+        is_tax_unit_head: true
+        employment_income: 50_000
+      adult2:
+        age: 35
+        is_tax_unit_spouse: true
+        employment_income: 0
+      child:
+        age: 5
+        is_tax_unit_dependent: true
+    tax_units:
+      tax_unit:
+        members: [adult1, adult2, child]
+        tax_unit_childcare_expenses: 5_000
+    households:
+      household:
+        members: [adult1, adult2, child]
+        state_code: CA
+  output:
+    # Baseline uses min(head_earned, spouse_earned) = min($50,000, $0) = $0
+    min_head_spouse_earned: 0
+    # No relevant expenses since capped at $0
+    cdcc_relevant_expenses: 0
+    cdcc: 0
+
+- name: Two-earner married couple unchanged by reform
+  period: 2024
+  reforms: policyengine_us.reforms.cdcc.cdcc_single_parent_work_requirement.cdcc_single_parent_work_requirement
+  input:
+    people:
+      adult1:
+        age: 35
+        is_tax_unit_head: true
+        employment_income: 50_000
+      adult2:
+        age: 35
+        is_tax_unit_spouse: true
+        employment_income: 30_000
+      child:
+        age: 5
+        is_tax_unit_dependent: true
+    tax_units:
+      tax_unit:
+        members: [adult1, adult2, child]
+        tax_unit_childcare_expenses: 5_000
+    households:
+      household:
+        members: [adult1, adult2, child]
+        state_code: CA
+  output:
+    # min_head_spouse_earned unchanged: min($50,000, $30,000) = $30,000
+    min_head_spouse_earned: 30_000
+    # Reform: min($5,000, $3,000, max($50,000, $30,000)) = min($5,000, $3,000, $50,000) = $3,000
+    # Same as baseline since both earnings exceed the $3,000 limit
+    cdcc_relevant_expenses: 3_000
+
+- name: Single parent unaffected by reform
+  period: 2024
+  reforms: policyengine_us.reforms.cdcc.cdcc_single_parent_work_requirement.cdcc_single_parent_work_requirement
+  input:
+    people:
+      adult:
+        age: 35
+        is_tax_unit_head: true
+        employment_income: 40_000
+      child:
+        age: 5
+        is_tax_unit_dependent: true
+    tax_units:
+      tax_unit:
+        members: [adult, child]
+        tax_unit_childcare_expenses: 4_000
+    households:
+      household:
+        members: [adult, child]
+        state_code: CA
+  output:
+    # Single filer - min_head_spouse_earned uses head_earned
+    min_head_spouse_earned: 40_000
+    # Reform: min($4,000, $3,000, $40,000) = $3,000 (same as baseline)
+    cdcc_relevant_expenses: 3_000
+
+- name: Spouse is the only earner - reform enables credit
+  period: 2024
+  reforms: policyengine_us.reforms.cdcc.cdcc_single_parent_work_requirement.cdcc_single_parent_work_requirement
+  input:
+    people:
+      adult1:
+        age: 35
+        is_tax_unit_head: true
+        employment_income: 0
+      adult2:
+        age: 35
+        is_tax_unit_spouse: true
+        employment_income: 60_000
+      child:
+        age: 3
+        is_tax_unit_dependent: true
+    tax_units:
+      tax_unit:
+        members: [adult1, adult2, child]
+        tax_unit_childcare_expenses: 8_000
+    households:
+      household:
+        members: [adult1, adult2, child]
+        state_code: CA
+  output:
+    # min_head_spouse_earned unchanged: min($0, $60,000) = $0
+    min_head_spouse_earned: 0
+    # Reform: min($8,000, $3,000, max($0, $60,000)) = min($8,000, $3,000, $60,000) = $3,000
+    cdcc_relevant_expenses: 3_000