[MaxGhenis]

This PR excludes dependents’ own subtraction items from the filers’ DC, Delaware and Ohio income tax returns. It also allocates the D-2440 disability income exclusion once per return and excludes dependent contributors from Ohio’s 529 deduction.

This branch retains the capital-income changes stacked from #9894. Merge #9894 first. It also retains main’s Ohio medical deduction fix from #9925, including its corrected integration expectations.

Changes and legal basis

• Exclude dependent income and expense items from the DC, Delaware and Ohio subtraction lists. Filers subtract their own amounts under D.C. Code 47-1803.02, 30 Del. C. 1106(b), and Ohio Revised Code 5747.01(A).
• Allocate the DC disability exclusion across filers in proportion to their capped payments. DC instructs filers in the D-2440 worksheet to combine taxpayer and spouse payments and apply one income reduction per return.
• Keep Ohio medical shares for care the filer paid for dependents. Ohio allows those expenses under Revised Code 5747.01(A)(10).
• Exclude dependent contributions and beneficiary counts before computing Ohio’s 529 deduction, then allocate the deduction among filer contributors. Ohio allows contributions by the taxpayer and spouse under Revised Code 5747.70(A).
• Preserve main’s capital gain, pension, charitable contribution and other adjustment calculations while retaining the stacked dependent masks. Apply those masks to Massachusetts’s new gain and dividend helpers. Massachusetts taxes children separately from their parents under the Commonwealth’s taxable unit guidance.

Invariants

• A dependent’s own subtraction items leave the filers’ state tax calculations unchanged. DC cases with disabled filers require a separate household-income eligibility check.
• Dependents receive zero DC and Delaware subtractions. Their Ohio deductions retain medical shares for expenses the filer paid for them.
• DC disability and Ohio medical amounts across people sum to one amount per return.
• Dependent 529 contributions and beneficiary counts leave the filers’ Ohio deduction unchanged.
• In the 2025 Massachusetts cases, dependents’ capital income leaves the filers’ gains, dividend loss offsets and income tax unchanged.
• The person helper matches core add rounding for filers and rejects group variables.

Methodology choices

• Allocate the return exclusion in proportion to each filer’s capped payments on D-2440.
• The model computes Ohio’s 529 deduction from individual contributor inputs; a supplied tax unit investment total no longer drives it. The model lacks beneficiary identifiers and retains its existing aggregate cap approximation.
• DC disability eligibility and income bases need separate fixes, as does Ohio’s Pell grant AGI inclusion. Keep Ohio medical expenses paid by the filer on the covered dependent’s row.
• Reconcile the 2021 unemployment income test separately. Massachusetts applies IRC 36B(d), including some dependents’ income, under TIR21-6.
• Narrow the new Iowa regression inputs to isolate filer scope. Reconcile the existing calculation against the Iowa Social Security worksheet separately.
• Preserve main’s unrounded marginal rate calculation when updating the Montana tax reference. Review its precision against the rounded DOR tax-table shortcut separately.
• Ohio’s 529 contributor correction needs an Axiom companion case; the existing queued parity work remains below.

Tests

Added eight helper cases, five Massachusetts capital income cases, and Ohio contributor, cap and allocation regressions. Added a Massachusetts Hypothesis property and extended the DC/Delaware/Ohio property. Updated the Montana reference cases for the pension exemption and credit for filer gains. Montana applies the pension adjustment before taxing Social Security under 2023 Form 2, page 6. Filers calculate the credit from gains on their federal return under the 2022 instructions.

Five formatting and lint runs passed. All 49 changed Python files and 37 YAML files parsed without syntax errors.

Local runs passed eight helper tests and 103 source-conflict checks. Seven local model attempts reached their time caps before reporting assertions. The required local file matrix remains incomplete.

CI at the current head passed all 297 required files, including both Massachusetts tests, the central subtraction property and all 30 cases in the two Montana files. All 36 CI jobs finished successfully, including Contrib.

Microsimulation impact

To be measured before merge.

Axiom parity

axiom: TheAxiomFoundation/rulespec-us#1424 queued (extended with DC, Delaware and Ohio companion cases: TheAxiomFoundation/rulespec-us#1424 (comment)). Delaware's refund subtraction is encoded-correct per return in us-de:policies/income_tax/resident_core_liability_pipeline#de_pit_2026_profile_candidate_other_statutory_subtractions (companion test supported modifications depreciation and schedule branch); DC 47-1803.02(a)(2) and Ohio 5747.01(A) are not encoded.

🤖 Generated with Claude Code

[MaxGhenis]

Overlap with #9925. #9925 makes the same Ohio change to oh_unreimbursed_medical_care_expense_deduction_person, in the same lines: it adds oh_insured_unreimbursed_medical_care_expenses_person in place of the tax-unit amount. It also floors federal AGI at 0 on worksheet line 6 and updates the reference URLs. Whichever PR lands second has a conflict in that file. The conflict is only in the comment and the URLs; the code is the same.

I merged both onto main 2d0815ae23, with #9925 949dd8d728, this PR 5386c7ccd9, the other group-projection fixes and #9897, keeping #9925's version of that file. The combination works. An earlier merge, with this PR at 6ae711ae21, passed:

• oh_unreimbursed_medical_care_expense_deduction.yaml, oh_insured_unreimbursed_medical_care_expenses.yaml, oh_deductions.yaml and integration_2025.yaml;
• test_oh_unreimbursed_medical_deduction_invariants.py and test_dependent_state_subtractions_invariants.py.

filer_amounts_recorded_on_dependents keeps the medical deduction on dependents, so #9925's prorated dependent share still counts. A re-run on the current heads is queued.

Dropping the Ohio medical hunk here would remove the conflict. Otherwise, whichever PR lands second takes the other's lines. The merge order with #9897's KNOWN_VIOLATIONS list is in #9897.