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Add NM, SC, and WV 529 plan deductions
Adds state-specific 529 plan deduction/subtraction variables for New Mexico, South Carolina, and West Virginia and wires them into each state income tax list. Adds targeted tests for each state so unlimited 529 deductions are included without relying on the generic capped state deduction parameter. Closes #7548. Closes #7561. Closes #7570.
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‎changelog.d/added/7548.md‎

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Add explicit New Mexico, South Carolina, and West Virginia 529 plan contribution deductions.

‎policyengine_us/parameters/gov/states/nm/tax/income/other_deductions_and_exemptions.yaml‎

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@@ -2,7 +2,7 @@ description: New Mexico other deduction and exemptions elements.
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values:
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2021-01-01:
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- us_govt_interest
5-
- investment_in_529_plan
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- nm_529_plan_deduction
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- military_service_income
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metadata:
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unit: list
@@ -19,4 +19,4 @@ metadata:
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- title: New Mexico Income Tax Act, Chapter 7 - Taxation, 3.3.1.12. INCOME FROM OBLIGATIONS OF GOVERNMENTS
2020
href: https://casetext.com/regulation/new-mexico-administrative-code/title-3-taxation/chapter-3-personal-income-taxes/part-1-general-provisions/section-33112-income-from-obligations-of-governments
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- title: New Mexico Income Tax Act, Chapter 7 - Taxation, 7-2-32. Deduction; payments into education trust fund.
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hef: https://nmonesource.com/nmos/nmsa/en/item/4340/index.do#!fragment/zoupio-_Toc141270056/BQCwhgziBcwMYgK4DsDWszIQewE4BUBTADwBdoAvbRABwEtsBaAfX2zgEYAWDgJgHYADIICsANgCUAGmTZShCAEVEhXAE9oAck1SIhMLgTLVG7bv2GQAZTykAQhoBKAUQAyzgGoBBAHIBhZylSMAAjaFJ2CQkgA
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href: https://nmonesource.com/nmos/nmsa/en/item/4340/index.do#!fragment/zoupio-_Toc141270056/BQCwhgziBcwMYgK4DsDWszIQewE4BUBTADwBdoAvbRABwEtsBaAfX2zgEYAWDgJgHYADIICsANgCUAGmTZShCAEVEhXAE9oAck1SIhMLgTLVG7bv2GQAZTykAQhoBKAUQAyzgGoBBAHIBhZylSMAAjaFJ2CQkgA

‎policyengine_us/parameters/gov/states/sc/tax/income/subtractions/subtractions.yaml‎

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- salt_refund_income
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- disability_benefits #include tax disability benefits
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- sc_net_capital_gain_deduction
7-
- investment_in_529_plan
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- sc_529_plan_deduction
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- us_govt_interest
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- taxable_social_security
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- sc_military_deduction
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- salt_refund_income
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- disability_benefits
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- sc_net_capital_gain_deduction
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- investment_in_529_plan
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- sc_529_plan_deduction
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- us_govt_interest
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- taxable_social_security
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- sc_military_deduction

‎policyengine_us/parameters/gov/states/wv/tax/income/subtractions/subtractions.yaml‎

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@@ -7,7 +7,7 @@ values:
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- wv_social_security_benefits_subtraction # Line 32
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- military_service_income # Line 34
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- salt_refund_income # Line 36
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- investment_in_529_plan
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- wv_529_plan_deduction
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- wv_senior_citizen_disability_deduction # Line 47
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- wv_low_income_earned_income_exclusion
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‎policyengine_us/tests/policy/baseline/gov/states/nm/tax/income/deductions/nm_529_plan_deduction.yaml‎

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- name: New Mexico deducts full 529 contributions
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period: 2024
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input:
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state_code: NM
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investment_in_529_plan_indv: 5_000
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output:
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nm_529_plan_deduction: 5_000
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nm_other_deductions_and_exemptions: 5_000
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- name: New Mexico sums 529 contributions across joint filers
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period: 2024
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input:
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people:
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person1:
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investment_in_529_plan_indv: 7_000
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person2:
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investment_in_529_plan_indv: 3_000
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tax_units:
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tax_unit:
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members: [person1, person2]
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filing_status: JOINT
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households:
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household:
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members: [person1, person2]
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state_code: NM
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output:
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nm_529_plan_deduction: 10_000
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nm_other_deductions_and_exemptions: 10_000
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- name: New Mexico 529 deduction is zero without contributions
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period: 2024
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input:
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state_code: NM
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investment_in_529_plan_indv: 0
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output:
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nm_529_plan_deduction: 0
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nm_other_deductions_and_exemptions: 0

‎policyengine_us/tests/policy/baseline/gov/states/sc/tax/income/subtractions/sc_529_plan_deduction.yaml‎

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- name: South Carolina deducts full 529 contributions
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period: 2024
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input:
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state_code: SC
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investment_in_529_plan_indv: 5_000
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output:
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sc_529_plan_deduction: 5_000
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sc_subtractions: 5_000
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- name: South Carolina sums 529 contributions across joint filers
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period: 2024
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input:
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people:
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person1:
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investment_in_529_plan_indv: 7_000
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person2:
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investment_in_529_plan_indv: 3_000
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tax_units:
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tax_unit:
20+
members: [person1, person2]
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filing_status: JOINT
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households:
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household:
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members: [person1, person2]
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state_code: SC
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output:
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sc_529_plan_deduction: 10_000
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sc_subtractions: 10_000
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- name: South Carolina 529 deduction is zero without contributions
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period: 2024
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input:
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state_code: SC
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investment_in_529_plan_indv: 0
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output:
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sc_529_plan_deduction: 0
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sc_subtractions: 0

‎policyengine_us/tests/policy/baseline/gov/states/wv/tax/income/subtractions/wv_529_plan_deduction.yaml‎

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- name: West Virginia deducts full 529 contributions
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period: 2024
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input:
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state_code: WV
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investment_in_529_plan_indv: 5_000
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output:
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wv_529_plan_deduction: 5_000
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wv_subtractions: 5_000
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- name: West Virginia sums 529 contributions across joint filers
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period: 2024
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input:
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people:
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person1:
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investment_in_529_plan_indv: 7_000
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person2:
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investment_in_529_plan_indv: 3_000
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tax_units:
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tax_unit:
20+
members: [person1, person2]
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filing_status: JOINT
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households:
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household:
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members: [person1, person2]
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state_code: WV
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output:
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wv_529_plan_deduction: 10_000
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wv_subtractions: 10_000
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- name: West Virginia 529 deduction is zero without contributions
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period: 2024
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input:
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state_code: WV
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investment_in_529_plan_indv: 0
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output:
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wv_529_plan_deduction: 0
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wv_subtractions: 0

‎policyengine_us/variables/gov/states/nm/tax/income/deductions/nm_529_plan_deduction.py‎

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from policyengine_us.model_api import *
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class nm_529_plan_deduction(Variable):
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value_type = float
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entity = TaxUnit
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label = "New Mexico 529 plan contribution deduction"
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unit = USD
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definition_period = YEAR
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reference = (
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"https://hed.nm.gov/financial-aid/new-mexico-529-college-savings-plan",
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"https://nmonesource.com/nmos/nmsa/en/item/4340/index.do",
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)
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defined_for = StateCode.NM
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def formula(tax_unit, period, parameters):
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return tax_unit("investment_in_529_plan", period)

‎policyengine_us/variables/gov/states/sc/tax/income/subtractions/sc_529_plan_deduction.py‎

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from policyengine_us.model_api import *
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class sc_529_plan_deduction(Variable):
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value_type = float
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entity = TaxUnit
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label = "South Carolina 529 plan contribution deduction"
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unit = USD
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definition_period = YEAR
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reference = (
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"https://www.scstatehouse.gov/code/t59c002.php",
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"https://treasurer.sc.gov/about-us/newsroom/529-updates-in-one-big-beautiful-bill-give-south-carolina-families-even-more-flexibility-for-educational-savings/",
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)
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defined_for = StateCode.SC
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def formula(tax_unit, period, parameters):
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return tax_unit("investment_in_529_plan", period)

‎policyengine_us/variables/gov/states/wv/tax/income/subtractions/wv_529_plan_deduction.py‎

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from policyengine_us.model_api import *
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class wv_529_plan_deduction(Variable):
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value_type = float
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entity = TaxUnit
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label = "West Virginia 529 plan contribution deduction"
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unit = USD
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definition_period = YEAR
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reference = (
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"https://www.smart529.com/learn/features-and-benefits.html",
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"https://code.wvlegislature.gov/11-21-12/",
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)
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defined_for = StateCode.WV
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def formula(tax_unit, period, parameters):
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return tax_unit("investment_in_529_plan", period)

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