Route pension and Social Security to older spouse in mixed-age households

changelog.d/gssi-age-aware-split.fixed.md

@@ -0,0 +1 @@
+Allocate Social Security (`gssi`) using the same age-aware rule as pensions: in mixed-age MFJ households, keep the full amount on the primary filer so state per-person SS exclusions (CO, MD, etc.) reach the qualifying spouse.

policyengine_taxsim/runners/policyengine_runner.py

@@ -190,17 +190,19 @@ def _initialize_dataset_structure(self) -> dict:
             "long_term_capital_gains",
             "partnership_s_corp_income",
             "short_term_capital_gains",
-            "social_security_retirement",
         }
     )
 
-    # Pension income is split only when both spouses meet the state-pension
-    # eligibility age (60, the lowest common threshold across states such
-    # as DE). When ages are mixed or both under 60, pension stays with the
-    # primary filer so the allocation still matches TAXSIM for records where
-    # age-based state rules don't apply.
-    _PENSION_FIELD = "taxable_private_pension_income"
-    _PENSION_SPLIT_AGE = 60
+    # Pension and Social Security income are split only when both spouses
+    # meet the state-level age threshold (60, the lowest common threshold
+    # across states such as DE). In mixed-age households (e.g. spouse under
+    # 60 while filer is elderly), the income stays with the primary filer so
+    # age-based state exclusions aren't lost on the younger spouse's
+    # incorrectly-allocated share.
+    _AGE_GATED_FIELDS = frozenset(
+        {"taxable_private_pension_income", "social_security_retirement"}
+    )
+    _AGE_GATED_SPLIT_AGE = 60
 
     @staticmethod
     def _make_primary_split(source_field):
@@ -223,34 +225,48 @@ def accessor(row):
         return accessor
 
     @classmethod
-    def _make_pension_primary(cls, source_field):
-        """Pension stays on primary unless both spouses are 60 or older."""
+    def _make_age_gated_primary(cls, source_field):
+        """Allocate age-gated income (pension, gssi) to the primary filer's
+        share. Both spouses 60+: 50/50. Mixed-age: assign entirely to the
+        older spouse so age-based state exclusions reach the qualifying
+        filer (see taxsim issues #774 for pensions, #924 for gssi). Both
+        under 60: all to primary by default."""
 
         def accessor(row):
             value = float(row.get(source_field, 0))
             if int(row.get("mstat", 1)) != 2:
                 return value
+            page = int(row.get("page", 0))
+            sage = int(row.get("sage", 0))
             both_old = (
-                int(row.get("page", 0)) >= cls._PENSION_SPLIT_AGE
-                and int(row.get("sage", 0)) >= cls._PENSION_SPLIT_AGE
+                page >= cls._AGE_GATED_SPLIT_AGE and sage >= cls._AGE_GATED_SPLIT_AGE
             )
-            return value / 2 if both_old else value
+            if both_old:
+                return value / 2
+            primary_is_older_or_equal = page >= sage
+            return value if primary_is_older_or_equal else 0.0
 
         return accessor
 
     @classmethod
-    def _make_pension_spouse(cls, source_field):
-        """Spouse only receives a pension share if both spouses are 60+."""
+    def _make_age_gated_spouse(cls, source_field):
+        """Spouse's share of age-gated income. Mirror of `_make_age_gated_primary`:
+        50/50 if both 60+, full amount to spouse only when spouse is strictly
+        older than primary in mixed-age cases."""
 
         def accessor(row):
             value = float(row.get(source_field, 0))
             if int(row.get("mstat", 1)) != 2:
                 return 0.0
+            page = int(row.get("page", 0))
+            sage = int(row.get("sage", 0))
             both_old = (
-                int(row.get("page", 0)) >= cls._PENSION_SPLIT_AGE
-                and int(row.get("sage", 0)) >= cls._PENSION_SPLIT_AGE
+                page >= cls._AGE_GATED_SPLIT_AGE and sage >= cls._AGE_GATED_SPLIT_AGE
             )
-            return value / 2 if both_old else 0.0
+            if both_old:
+                return value / 2
+            spouse_is_strictly_older = sage > page
+            return value if spouse_is_strictly_older else 0.0
 
         return accessor
 
@@ -309,12 +325,14 @@ def _get_taxsim_to_pe_variable_mapping(self) -> dict:
                                 "dependent": 0.0,
                                 "default": 0.0,
                             }
-                        elif pe_var == self._PENSION_FIELD:
-                            # Pension requires the age-aware split (both
-                            # spouses must be 60+ to share the exclusion).
+                        elif pe_var in self._AGE_GATED_FIELDS:
+                            # Pension and Social Security require the
+                            # age-aware split (both spouses must be 60+
+                            # to share, otherwise it stays with the primary
+                            # filer so age-based exclusions aren't lost).
                             variable_mapping[pe_var] = {
-                                "primary": self._make_pension_primary(taxsim_var),
-                                "spouse": self._make_pension_spouse(taxsim_var),
+                                "primary": self._make_age_gated_primary(taxsim_var),
+                                "spouse": self._make_age_gated_spouse(taxsim_var),
                                 "dependent": 0.0,
                                 "default": 0.0,
                             }

tests/test_spouse_income_splitting.py

@@ -6,9 +6,10 @@
 exclusion, DE pension exclusion) apply to both spouses. See issues #665
 and #838.
 
-Pension income uses an age-aware rule: split only when both spouses are
-60 or older; otherwise the full amount stays with the primary filer to
-preserve state per-person elderly exclusions (GA, MD, NJ, etc.).
+Pension and Social Security income use an age-aware rule: split only when
+both spouses are 60 or older; otherwise the full amount stays with the
+primary filer to preserve state per-person elderly exclusions (CO, GA, MD,
+NJ, etc.). See issue #924.
 """
 
 import numpy as np
@@ -54,7 +55,6 @@ def _base_mfj_record(taxsimid=1, **overrides):
         ("dividends", "qualified_dividend_income", 80000),
         ("ltcg", "long_term_capital_gains", 60000),
         ("stcg", "short_term_capital_gains", 30000),
-        ("gssi", "social_security_retirement", 40000),
         ("scorp", "partnership_s_corp_income", 50000),
     ],
 )
@@ -107,25 +107,66 @@ def test_pension_splits_when_both_spouses_are_60_plus():
     np.testing.assert_allclose(values, [20000.0, 20000.0])
 
 
-def test_pension_stays_on_primary_for_mixed_age_couple():
-    """Pension: when only one spouse is 60+, keep full pension on primary
-    so the qualifying spouse claims the per-person exclusion. Splitting
-    50/50 would push half the pension onto the under-60 spouse and
-    eliminate half the exclusion (see #838 validation)."""
+def test_pension_goes_to_primary_when_primary_is_older():
+    """Pension: mixed-age, primary older — keep full pension on primary
+    so they claim the per-person elderly exclusion. Splitting 50/50 would
+    push half onto the under-60 spouse and lose half the exclusion
+    (see #838 validation)."""
     df = pd.DataFrame([_base_mfj_record(page=70, sage=50, pensions=40000)])
     values = _run_allocation(df, "taxable_private_pension_income")
     np.testing.assert_allclose(values, [40000.0, 0.0])
 
 
+def test_pension_goes_to_spouse_when_spouse_is_older():
+    """Pension: mixed-age, spouse older — assign full pension to spouse
+    so the qualifying filer claims the exclusion. See taxsim issue #774:
+    IA pension subtraction is age-55+, and with page=54 / sage=55 the
+    older spouse should hold the pension."""
+    df = pd.DataFrame([_base_mfj_record(page=54, sage=55, pensions=40000)])
+    values = _run_allocation(df, "taxable_private_pension_income")
+    np.testing.assert_allclose(values, [0.0, 40000.0])
+
+
 def test_pension_stays_on_primary_when_both_under_60():
     """Pension: when neither spouse is 60+, state elderly exclusions
-    do not apply. Keep on primary to match pre-fix behavior for the
-    non-elderly case."""
+    do not apply. Default to primary."""
     df = pd.DataFrame([_base_mfj_record(page=45, sage=45, pensions=30000)])
     values = _run_allocation(df, "taxable_private_pension_income")
     np.testing.assert_allclose(values, [30000.0, 0.0])
 
 
+def test_gssi_splits_when_both_spouses_are_60_plus():
+    """gssi: when both spouses ≥ 60, allocate 50/50 so both qualify
+    for state per-person SS exclusions."""
+    df = pd.DataFrame([_base_mfj_record(page=65, sage=65, gssi=40000)])
+    values = _run_allocation(df, "social_security_retirement")
+    np.testing.assert_allclose(values, [20000.0, 20000.0])
+
+
+def test_gssi_goes_to_older_spouse_for_mixed_age_couple():
+    """gssi: mixed-age (primary 75, spouse 40), keep full SS on the older
+    primary so age-based state exclusions (CO, MD) reach the qualifying
+    filer. See taxsim issue #924."""
+    df = pd.DataFrame([_base_mfj_record(page=75, sage=40, gssi=40000)])
+    values = _run_allocation(df, "social_security_retirement")
+    np.testing.assert_allclose(values, [40000.0, 0.0])
+
+
+def test_gssi_goes_to_spouse_when_spouse_is_older():
+    """gssi: mixed-age, spouse older — assign all SS to spouse so they
+    claim the age-based subtraction."""
+    df = pd.DataFrame([_base_mfj_record(page=40, sage=75, gssi=40000)])
+    values = _run_allocation(df, "social_security_retirement")
+    np.testing.assert_allclose(values, [0.0, 40000.0])
+
+
+def test_gssi_stays_on_primary_when_both_under_60():
+    """gssi: when neither spouse is 60+, default to primary."""
+    df = pd.DataFrame([_base_mfj_record(page=45, sage=45, gssi=40000)])
+    values = _run_allocation(df, "social_security_retirement")
+    np.testing.assert_allclose(values, [40000.0, 0.0])
+
+
 def test_de_elderly_pension_matches_issue_838():
     """End-to-end: DE elderly couple with pension income should produce
     a state tax close to TAXSIM after the 50/50 split. Issue #838 reported