Create phaseout for NYC school credit for NYC CTC proposal (#5510)

* Include the New York 2025 inflation rebate in the net income tree
Fixes #5507

* format

* docstring, reference and format

* minor

* readme

Author: PavelMakarchuk

changelog_entry.yaml

@@ -0,0 +1,4 @@
+- bump: minor
+  changes:
+    added:
+    - NYC school tax credit phase out reform.

policyengine_us/parameters/gov/contrib/local/nyc/stc/phase_out/in_effect.yaml

@@ -0,0 +1,9 @@
+description: The NYC school tax credit phases out with state adjusted gross income, if this is true.
+
+values:
+  0000-01-01: false
+
+metadata:
+  unit: bool
+  period: year
+  label: NYC school tax credit phase out in effect

policyengine_us/parameters/gov/contrib/local/nyc/stc/phase_out/rate/joint_and_surviving_spouse.yaml

@@ -0,0 +1,20 @@
+description: New York reduces the NYC school tax credit for joint filers and surviving spouses at this rate, based on state adjusted gross income.
+metadata:
+  type: marginal_rate
+  threshold_unit: currency-USD
+  rate_unit: /1
+  period: year
+  label: NYC school tax credit joint and surviving spouse reduction rate
+  reference:
+  - title: New York Senate Bill S2238 §1(4-c)(B)
+    href: https://www.nysenate.gov/legislation/bills/2025/S2238
+
+brackets:
+  - threshold:
+      2025-01-01: 0
+    rate:
+      2025-01-01: 0
+  - threshold:
+      2025-01-01: 150_000
+    rate:
+      2025-01-01: 0.05

policyengine_us/parameters/gov/contrib/local/nyc/stc/phase_out/rate/other.yaml

@@ -0,0 +1,20 @@
+description: New York reduces the NYC school tax credit for single, separate, and head of household filers, based on state adjusted gross income.
+metadata:
+  type: marginal_rate
+  threshold_unit: currency-USD
+  rate_unit: /1
+  period: year
+  label: NYC school tax credit other reduction rate
+  reference:
+  - title: New York Senate Bill S2238 §1(4-c)(A)
+    href: https://www.nysenate.gov/legislation/bills/2025/S2238
+
+brackets:
+  - threshold:
+      2025-01-01: 0
+    rate:
+      2025-01-01: 0
+  - threshold:
+      2025-01-01: 75_000
+    rate:
+      2025-01-01: 0.05

policyengine_us/reforms/local/nyc/stc/phase_out/README.md

@@ -0,0 +1,7 @@
+## NYC School Tax Credit Reform with Phase-Out
+
+# This code defines a policy reform for implementing a New York City School Tax Credit with a phase-out mechanism, as outlined in [Senate Bill S2238](https://www.nysenate.gov/legislation/bills/2025/S2238).
+
+# The credit is phased out based on state adjusted gross income (AGI) and filing status. 
+
+# The phase-out start threshold is doubled for joint filers and surviving spouses.

policyengine_us/reforms/local/nyc/stc/phase_out/__init__.py

@@ -0,0 +1,3 @@
+from .nyc_school_tax_credit_with_phase_out import (
+    create_nyc_school_tax_credit_with_phase_out_reform,
+)

policyengine_us/reforms/local/nyc/stc/phase_out/nyc_school_tax_credit_with_phase_out.py

@@ -0,0 +1,84 @@
+from policyengine_us.model_api import *
+from policyengine_core.periods import period as period_
+
+
+def create_nyc_school_tax_credit_with_phase_out() -> Reform:
+    class nyc_school_tax_credit_phase_out(Variable):
+        value_type = float
+        unit = USD
+        entity = TaxUnit
+        label = "NYC School Tax Credit Phase Out"
+        definition_period = YEAR
+        defined_for = "in_nyc"
+        reference = "https://www.nysenate.gov/legislation/bills/2025/S2238"
+
+        def formula(tax_unit, period, parameters):
+            agi = tax_unit("ny_agi", period)
+            filing_status = tax_unit("filing_status", period)
+            joint = filing_status == filing_status.possible_values.JOINT
+            surviving_spouse = (
+                filing_status == filing_status.possible_values.SURVIVING_SPOUSE
+            )
+            joint_filers = joint | surviving_spouse
+            p = parameters(period).gov.contrib.local.nyc.stc.phase_out.rate
+            return where(
+                joint_filers,
+                p.joint_and_surviving_spouse.calc(agi),
+                p.other.calc(agi),
+            )
+
+    class nyc_school_tax_credit(Variable):
+        value_type = float
+        entity = TaxUnit
+        label = "NYC School Tax Credit"
+        unit = USD
+        definition_period = YEAR
+        defined_for = "in_nyc"
+        reference = "https://www.nysenate.gov/legislation/bills/2025/S2238"
+
+        def formula(tax_unit, period, parameters):
+            base_amount = add(
+                tax_unit,
+                period,
+                [
+                    "nyc_school_tax_credit_fixed_amount",
+                    "nyc_school_tax_credit_rate_reduction_amount",
+                ],
+            )
+            phase_out = tax_unit("nyc_school_tax_credit_phase_out", period)
+            return max_(0, base_amount - phase_out)
+
+    class reform(Reform):
+        def apply(self):
+            self.update_variable(nyc_school_tax_credit_phase_out)
+            self.update_variable(nyc_school_tax_credit)
+
+    return reform
+
+
+def create_nyc_school_tax_credit_with_phase_out_reform(
+    parameters, period, bypass: bool = False
+):
+    if bypass:
+        return create_nyc_school_tax_credit_with_phase_out()
+
+    p = parameters.gov.contrib.local.nyc.stc.phase_out
+
+    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_nyc_school_tax_credit_with_phase_out()
+    else:
+        return None
+
+
+nyc_school_tax_credit_with_phase_out = (
+    create_nyc_school_tax_credit_with_phase_out_reform(None, None, bypass=True)
+)

policyengine_us/reforms/reforms.py

@@ -82,6 +82,10 @@
     create_limit_salt_deduction_to_property_taxes_reform,
 )
 
+from .local.nyc.stc.phase_out import (
+    create_nyc_school_tax_credit_with_phase_out_reform,
+)
+
 from policyengine_core.reforms import Reform
 import warnings
 
@@ -181,6 +185,9 @@ def create_structural_reforms_from_parameters(parameters, period):
             parameters, period
         )
     )
+    nyc_school_tax_credit_with_phase_out = (
+        create_nyc_school_tax_credit_with_phase_out_reform(parameters, period)
+    )
 
     reforms = [
         afa_reform,
@@ -218,6 +225,7 @@ def create_structural_reforms_from_parameters(parameters, period):
         dc_property_tax_credit,
         ny_2025_inflation_rebates,
         limit_salt_deduction_to_property_taxes,
+        nyc_school_tax_credit_with_phase_out,
     ]
     reforms = tuple(filter(lambda x: x is not None, reforms))
 

policyengine_us/tests/policy/contrib/local/nyc/stc/nyc_school_tax_credit_with_phase_out.yaml

@@ -0,0 +1,49 @@
+- name: Joint, with AGI below phase out threshold
+  period: 2025
+  reforms: policyengine_us.reforms.local.nyc.stc.phase_out.nyc_school_tax_credit_with_phase_out.nyc_school_tax_credit_with_phase_out
+  input:
+    gov.contrib.local.nyc.stc.phase_out.in_effect: true
+    in_nyc: True
+    ny_agi: 150_000
+    filing_status: JOINT
+  output:
+    nyc_school_tax_credit_phase_out: 0
+
+- name: Single, with AGI above phase out threshold
+  period: 2025
+  reforms: policyengine_us.reforms.local.nyc.stc.phase_out.nyc_school_tax_credit_with_phase_out.nyc_school_tax_credit_with_phase_out
+  input:
+    gov.contrib.local.nyc.stc.phase_out.in_effect: true
+    in_nyc: True
+    ny_agi: 150_000
+    filing_status: SINGLE
+  output:
+    nyc_school_tax_credit_phase_out: 3_750
+
+- name: Single, with AGI above phase out threshold, with credit amount, fully reduced
+  period: 2025
+  reforms: policyengine_us.reforms.local.nyc.stc.phase_out.nyc_school_tax_credit_with_phase_out.nyc_school_tax_credit_with_phase_out
+  input:
+    gov.contrib.local.nyc.stc.phase_out.in_effect: true
+    in_nyc: True
+    ny_agi: 150_000
+    filing_status: SINGLE
+    nyc_school_tax_credit_fixed_amount: 1_000
+    nyc_school_tax_credit_rate_reduction_amount: 500
+  output:
+    nyc_school_tax_credit_phase_out: 3_750
+    nyc_school_tax_credit: 0
+
+- name: Single, with AGI above phase out threshold, with credit amount, partially reduced
+  period: 2025
+  reforms: policyengine_us.reforms.local.nyc.stc.phase_out.nyc_school_tax_credit_with_phase_out.nyc_school_tax_credit_with_phase_out
+  input:
+    gov.contrib.local.nyc.stc.phase_out.in_effect: true
+    in_nyc: True
+    ny_agi: 160_000
+    filing_status: SURVIVING_SPOUSE
+    nyc_school_tax_credit_fixed_amount: 1_000
+    nyc_school_tax_credit_rate_reduction_amount: 600
+  output:
+    nyc_school_tax_credit_phase_out: 500
+    nyc_school_tax_credit: 1_100