Update Kentucky 2025 Individual Income Tax Model #7098
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Starting implementation of Kentucky 2025 individual income tax updates. Refs PolicyEngine#7097
- rate.yaml: Added 2025 Form 740 Instructions (page 2) reference - standard.yaml: Added 2025 Form 740 Instructions (page 2) reference - family_size/rate.yaml: Added 2025 Schedule ITC (page 2) reference - family_size/family_size_cap.yaml: Added 2025 Schedule ITC (page 2) reference - personal/amount/aged.yaml: Added 2025 Schedule ITC Section B (page 2) reference - personal/amount/blind.yaml: Added 2025 Schedule ITC Section B (page 2) reference - personal/amount/military.yaml: Added 2025 Schedule ITC Section B (page 2) reference - tuition_tax/rate.yaml: Added 2025 Form 8863-K (page 1) reference - dependent_care_service/match.yaml: Added 2025 Form 740 Instructions (page 9) reference - pension_income/threshold.yaml: Added 2025 Schedule P (page 1) reference Closes PolicyEngine#7097 🤖 Generated with [Claude Code](https://claude.com/claude-code) Co-Authored-By: Claude Opus 4.5 <[email protected]>
Tests verify the 2025 parameter values and calculation pipeline: - Tax rate: 4% - Standard deduction: $3,270 - Personal credits: Aged $40, Blind $40, Military $20 - Dependent care credit: 20% of federal - Tuition tax credit: 25% of federal - Pension income exclusion: $31,110 threshold - Family Size Tax Credit: Based on FPG thresholds Includes 29 test scenarios covering: - Single and MFJ filing with standard deduction - Family Size Tax Credit at various income levels (100%, 115%, 130%) - Personal tax credits (aged, blind, military) - Dependent care credit calculations - Pension income exclusion (under/over threshold) - Edge cases and 2024 vs 2025 comparison tests Related to Issue PolicyEngine#7097 🤖 Generated with [Claude Code](https://claude.com/claude-code) Co-Authored-By: Claude Opus 4.5 <[email protected]>
🤖 Generated with [Claude Code](https://claude.com/claude-code) Co-Authored-By: Claude Opus 4.5 <[email protected]>
Codecov Report✅ All modified and coverable lines are covered by tests. Additional details and impacted files@@ Coverage Diff @@
## main #7098 +/- ##
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- Coverage 100.00% 73.31% -26.69%
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Files 10 3649 +3639
Lines 144 52526 +52382
Branches 0 263 +263
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+ Hits 144 38509 +38365
- Misses 0 13993 +13993
- Partials 0 24 +24
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- Removed separate ky_2025_integration.yaml file - Added key 2025 tests to integration.yaml: - Single filer standard deduction ($3,270) - MFJ filing status optimization - FSTC at 100% threshold - Aged personal credit ($40) - Pension exclusion ($31,110 cap) - Dependent care credit (20% of federal) 🤖 Generated with [Claude Code](https://claude.com/claude-code) Co-Authored-By: Claude Opus 4.5 <[email protected]>
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CI Status: All Checks PassingAll CI checks have completed successfully:
This PR is now ready for review. Generated with Claude Code |
DTrim99
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Jan 5, 2026
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📋 Code Review Summary
✅ Strengths
- All CI checks passing - code is properly formatted and all tests pass
- Good coverage of 2025 Kentucky tax parameters with comprehensive references
- Follows PolicyEngine patterns correctly - no hard-coded values in formulas
- Proper use of state-level parameter organization
- Integration tests cover key scenarios: standard deduction, filing optimization, FSTC, aged credit, pension exclusion, and dependent care credit
🔍 Issues Found
Pre-Existing Issues (Not introduced by this PR - optional to fix)
-
Incorrect label in
pension_income/threshold.yaml(line 14)- Current:
label: Kentucky income tax rate - Should be:
label: Kentucky pension income exclusion threshold - This parameter defines the pension exclusion threshold, not the tax rate
- Current:
-
Incorrect unit in
personal/amount/blind.yaml(line 5)- Current:
unit: year - Should be:
unit: currency-USD(this is a $40 dollar amount)
- Current:
-
Incorrect unit in
personal/amount/military.yaml(line 5)- Current:
unit: year - Should be:
unit: currency-USD(this is a $20 dollar amount)
- Current:
-
Minor typo in test comments (lines 97, 167)
- "perpon" should be "person" in the comment about older person being head
Reference Consistency Notes
Some existing references show "(2024)" titles pointing to "(2025)" URLs - this appears to be an existing pattern where the 2024 reference links to the updated 2025 form. This is fine but could be clarified in future cleanups.
📊 Validation Results
- Domain Validation: ✅ No issues - proper federal/state separation, naming conventions followed
- Reference Validation: ✅ All 2025 references added with appropriate Kentucky DOR sources
- Implementation Validation: ✅ No hard-coded values, no incomplete implementations
- Test Coverage: ✅ Good basic coverage (see suggestions below)
💡 Test Coverage Suggestions (Optional)
The current tests are solid. For even better coverage, consider adding:
- Age boundary tests: Age exactly 65 vs 64 for the aged credit
- FSTC boundaries: Income at 104% FPL (rate drops to 90%) and 133% FPL (rate drops to 0%)
- Pension at exact threshold: $31,110 pension (exact cap value)
- Family size cap: Family size 5+ to verify cap at 4 works
- Zero income case: Verifies all calculations handle edge of zero correctly
✨ Verification
I verified the 2025 Kentucky parameter values against official sources:
- Standard deduction: $3,270 ✅ (KY DOR announcement)
- Tax rate: 4% ✅ (unchanged from 2024, drops to 3.5% in 2026 per HB 1)
- Personal credits: $40 aged/blind, $20 military ✅
📝 Recommendation
APPROVE - This is a well-structured update that correctly adds 2025 Kentucky income tax parameters. The pre-existing metadata issues are minor and don't affect functionality. All tests pass and the implementation follows PolicyEngine patterns correctly.
🤖 Generated with Claude Code
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Summary
Update Kentucky income tax model for tax year 2025. This includes:
Fixes #7097
Status
Reference Documents
Generated with Claude Code
Co-Authored-By: Claude [email protected]