Update Michigan 2025 Individual Income Tax Model

[DTrim99]

Summary

Updates Michigan income tax implementation for tax year 2025.

Fixes #7120

Changes

Parameter Value Updates (2024 -> 2025)

Parameter	2024 Value	2025 Value	Source
Personal Exemption	$5,600	$5,800	MI-1040 Instructions p.3
Disabled Exemption	$3,300	$3,400	MI-1040 Instructions p.3
Homestead Property Value Limit	$160,700	$165,400	MI-1040CR Form
Homestead Credit Cap	$1,800	$1,900	MI-1040CR Form
Homestead Reduction Start	$60,700	$62,500	MI-1040CR Form
Tier One Retirement (Single)	$64,040	$65,897	Michigan Retirement Benefits
Tier One Retirement (Joint)	$128,080	$131,794	Michigan Retirement Benefits

Parameters Unchanged (Reference Added)

• Tax Rate: 4.25% (confirmed per Treasury Notice)
• EITC Match: 30%
• Disabled Veteran Exemption: $500
• Standard Deduction amounts
• Dependent on Other Return: $1,500

Files Modified

• 26 parameter files with 2025 values and references
• 9 test files with 2025-specific test cases
• 1 documentation file (sources/working_references.md)

Test Coverage

• 246 Michigan income tax tests pass
• Added 2025-specific tests for all updated parameters
• Added edge case tests for boundary conditions

Regulatory Authority

• Michigan Income Tax Act (MCL 206)
• 2025 MI-1040 Instructions
• 2025 Withholding Guide (Form 446)

🤖 Generated with Claude Code

[codecov]

Codecov Report

✅ All modified and coverable lines are covered by tests.
✅ Project coverage is 72.82%. Comparing base (fc2b613) to head (6e8f5b5).
⚠️ Report is 45 commits behind head on main.

Additional details and impacted files

@@             Coverage Diff              @@
##              main    #7121       +/-   ##
============================================
- Coverage   100.00%   72.82%   -27.18%     
============================================
  Files           10     3649     +3639     
  Lines          144    52526    +52382     
  Branches         0      263      +263     
============================================
+ Hits           144    38253    +38109     
- Misses           0    14259    +14259     
- Partials         0       14       +14     

Flag	Coverage Δ
unittests	72.82% <ø> (-27.18%)	⬇️

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[DTrim99]

PR Review: Michigan 2025 Income Tax Update

🟢 No Critical Issues Found

This PR updates Michigan income tax parameters for tax year 2025. All core requirements appear to be met.

🟡 Should Address

1. Reference Specificity (2 files)

File	Issue
homestead_property_tax/reduction/start.yaml	2025 reference missing specific line/table number (unlike 2024 reference which mentions "Table B")
deductions/retirement_benefits/tier_one/amount.yaml	2025 reference is a web page without specific section; prior years use PDF with page numbers

Recommendation: Add specific line or table references to match the specificity of prior year references.

2. Typo Fixes Appreciated

The PR fixes several "Indiviudal" → "Individual" typos in reference titles. Good catch!

🟢 Suggestions

1. Consider Adding 2025 Integration Test

The mi/tax/income/integration.yaml file currently has tests for 2021 and 2024, but no 2025 test. Consider adding one to verify full tax calculation with new parameters.

2. Missing 2025 Test for Alternate Senior Amount

File mi_homestead_property_tax_credit_alternate_senior_amount.yaml only has 2021 tests. Consider adding 2025 test with $1,900 cap.

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Validation Summary

Check	Result
Regulatory Accuracy	⚠️ Unable to independently verify (Michigan.gov PDFs blocked) - values follow consistent uprating patterns
Reference Quality	✅ 4/6 have specific page numbers, 2 need improvement
Code Patterns	✅ No issues - proper separators, metadata, structure
Test Coverage	✅ Good - all 7 major parameters have 2025 tests with edge cases
CI Status	✅ All tests passing (only codecov/project info flag)

Parameter Values Summary

Parameter	2024	2025	Change
Personal Exemption	$5,600	$5,800	+$200
Disabled Exemption	$3,300	$3,400	+$100
Homestead Property Value Limit	$160,700	$165,400	+$4,700
Homestead Credit Cap	$1,800	$1,900	+$100
Homestead Reduction Start	$60,700	$62,500	+$1,800
Tier One Retirement (Single)	$64,040	$65,897	+$1,857
Tier One Retirement (Joint)	$128,080	$131,794	+$3,714

All changes follow consistent inflation adjustment patterns.

Files Changed

• 26 parameter files with 2025 values and references
• 9 test files with comprehensive 2025 test cases
• 1 documentation file (working_references.md)
• 1 changelog entry

Next Steps

Minor reference improvements suggested above. Otherwise, this PR looks ready for merge.

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To auto-fix issues: /fix-pr 7121