Add SSTB self-employment income variable and split QBID by category

changelog.d/add-sstb-self-employment-income.added.md

@@ -0,0 +1 @@
+Add `sstb_self_employment_income` and split QBID into non-SSTB and SSTB components per IRC §199A(d). Mixed SSTB/non-SSTB wage-limited cases can also provide `sstb_w2_wages_from_qualified_business` and `sstb_unadjusted_basis_qualified_property` to match Form 8995-A's separate SSTB wage/UBIA inputs.

policyengine_us/parameters/gov/household/market_income_sources.yaml

@@ -3,6 +3,7 @@ values:
   0000-01-01:
   - employment_income
   - self_employment_income
+  - sstb_self_employment_income
   - partnership_s_corp_income
   - gi_cash_assistance
   - farm_income

policyengine_us/parameters/gov/irs/gross_income/sources.yaml

@@ -3,6 +3,7 @@ values:
   2010-01-01:
     - irs_employment_income
     - self_employment_income
+    - sstb_self_employment_income
     - partnership_s_corp_income
     - farm_income
     - farm_rent_income

policyengine_us/tests/policy/baseline/gov/irs/income/taxable_income/deductions/qbid/qbid_amount.yaml

@@ -199,3 +199,102 @@
     # REIT/PTP component = 0.20 * 25k = $5,000.
     # Total = $15,000.
     qbid_amount: 15_000
+
+# Mixed SSTB / non-SSTB tests (Form 8995-A, columns A vs B)
+- name: Mixed SSTB and non-SSTB above threshold - SSTB phased out, non-SSTB capped
+  period: 2024
+  input:
+    qualified_business_income: 50_000
+    sstb_qualified_business_income: 50_000
+    w2_wages_from_qualified_business: 100_000
+    unadjusted_basis_qualified_property: 0
+    taxable_income_less_qbid: 300_000
+    qualified_reit_and_ptp_income: 0
+    business_is_sstb: false
+    filing_status: SINGLE
+  output:
+    # Single 2024 threshold $191,950, length $50,000.
+    # Reduction rate = min(1, (300k - 191.95k)/50k) = 1 → applicable rate = 0.
+    # Non-SSTB component:
+    #   qbid_max = 0.20 * 50k = $10,000
+    #   wage_cap = 0.50 * 100k = $50,000
+    #   min($10k, $50k) = $10,000.
+    # SSTB component: 0 (applicable rate = 0).
+    # Total = $10,000.
+    qbid_amount: 10_000
+
+- name: Mixed SSTB and non-SSTB below threshold - both get full 20% deduction
+  period: 2024
+  input:
+    qualified_business_income: 50_000
+    sstb_qualified_business_income: 50_000
+    w2_wages_from_qualified_business: 0
+    unadjusted_basis_qualified_property: 0
+    taxable_income_less_qbid: 100_000
+    qualified_reit_and_ptp_income: 0
+    business_is_sstb: false
+    filing_status: SINGLE
+  output:
+    # Below threshold, so SSTB phaseout does not apply and W-2/UBIA limits do not bind.
+    # Non-SSTB: 0.20 * 50k = $10,000.
+    # SSTB:     0.20 * 50k = $10,000.
+    # Total = $20,000.
+    qbid_amount: 20_000
+
+- name: Mixed SSTB and non-SSTB in phase-in range with separate allocable wages
+  absolute_error_margin: 0.01
+  period: 2024
+  input:
+    qualified_business_income: 100_000
+    sstb_qualified_business_income: 100_000
+    w2_wages_from_qualified_business: 20_000
+    sstb_w2_wages_from_qualified_business: 10_000
+    unadjusted_basis_qualified_property: 0
+    sstb_unadjusted_basis_qualified_property: 0
+    taxable_income_less_qbid: 200_000
+    qualified_reit_and_ptp_income: 0
+    business_is_sstb: false
+    filing_status: SINGLE
+  output:
+    # Single 2024 threshold $191,950, length $50,000.
+    # Reduction rate = (200k - 191.95k) / 50k = 0.161; applicable rate = 0.839.
+    # Non-SSTB W-2 wages = 10k => cap = 5k.
+    #   Non-SSTB deduction = 20k - 0.161 * (20k - 5k) = 17,585.00.
+    # SSTB W-2 wages = 10k => applicable-percentage cap = 0.839 * 5k = 4,195.
+    #   SSTB deduction = 16,780 - 0.161 * (16,780 - 4,195) = 14,753.82.
+    # Total = 32,338.82.
+    qbid_amount: 32_338.82
+
+- name: Only SSTB QBI fully phased out above threshold
+  period: 2024
+  input:
+    qualified_business_income: 0
+    sstb_qualified_business_income: 100_000
+    w2_wages_from_qualified_business: 0
+    unadjusted_basis_qualified_property: 0
+    taxable_income_less_qbid: 300_000
+    qualified_reit_and_ptp_income: 0
+    business_is_sstb: false
+    filing_status: SINGLE
+  output:
+    # Above threshold; SSTB applicable rate = 0; non-SSTB QBI = 0.
+    qbid_amount: 0
+
+- name: Only SSTB QBI in phase-in range
+  period: 2024
+  input:
+    qualified_business_income: 0
+    sstb_qualified_business_income: 100_000
+    w2_wages_from_qualified_business: 50_000
+    unadjusted_basis_qualified_property: 0
+    taxable_income_less_qbid: 216_950
+    qualified_reit_and_ptp_income: 0
+    business_is_sstb: false
+    filing_status: SINGLE
+  output:
+    # Reduction rate = (216_950 - 191_950) / 50_000 = 0.5 → applicable rate = 0.5
+    # Reduced QBI = 50_000; reduced W-2 = 25_000.
+    # qbid_max (reduced) = 0.20 * 50_000 = 10_000.
+    # wage_cap (reduced) = 0.50 * 25_000 = 12_500.
+    # min(10_000, 12_500) = 10_000.
+    qbid_amount: 10_000

policyengine_us/tests/policy/baseline/gov/irs/income/taxable_income/deductions/qbid/qualified_business_income.yaml

@@ -57,3 +57,26 @@
     self_employed_pension_contribution_ald_person: 0
   output:
     qualified_business_income: 9_000
+
+- name: SSTB SE income excluded; deductions pro-rated to non-SSTB
+  period: 2026
+  input:
+    self_employment_income: 30_000
+    sstb_self_employment_income: 70_000
+    self_employment_tax_ald_person: 1_000
+    self_employed_health_insurance_ald_person: 0
+    self_employed_pension_contribution_ald_person: 0
+  output:
+    # Non-SSTB share = 30_000 / 100_000 = 0.3
+    # Non-SSTB QBI = 30_000 - 0.3 * 1_000 = 29_700
+    qualified_business_income: 29_700
+
+- name: Only SSTB SE income, non-SSTB QBI is zero
+  period: 2026
+  input:
+    sstb_self_employment_income: 100_000
+    self_employment_tax_ald_person: 1_000
+    self_employed_health_insurance_ald_person: 0
+    self_employed_pension_contribution_ald_person: 0
+  output:
+    qualified_business_income: 0

policyengine_us/tests/policy/baseline/gov/irs/income/taxable_income/deductions/qbid/qualified_business_income_deduction.yaml

@@ -57,3 +57,105 @@
     qualified_business_income: 1_000
   output:
     qualified_business_income_deduction: 2_000
+
+- name: Deduction floor in effect with SSTB-only income
+  absolute_error_margin: 0.01
+  period: 2026
+  input:
+    people:
+      person1:
+        sstb_self_employment_income: 1_000
+        self_employment_tax_ald_person: 0
+        self_employed_health_insurance_ald_person: 0
+        self_employed_pension_contribution_ald_person: 0
+        qbid_amount: 200
+        is_tax_unit_head: true
+    tax_units:
+      tax_unit:
+        members: [person1]
+        taxable_income_less_qbid: 600
+        adjusted_net_capital_gain: 0
+    families:
+      family:
+        members: [person1]
+    spm_units:
+      spm_unit:
+        members: [person1]
+    households:
+      household:
+        members: [person1]
+        state_fips: 6
+  output:
+    qualified_business_income_deduction: 400
+
+# Integration test: doctor (SSTB) with rental property (non-SSTB) above threshold.
+# Demonstrates the §199A(d)(3) phaseout reaching only the SSTB component
+# while the non-SSTB business still receives the W-2 capped deduction.
+- name: Mixed SSTB and non-SSTB above threshold
+  absolute_error_margin: 1
+  period: 2025
+  input:
+    people:
+      person1:
+        employment_income: 400_000
+        self_employment_income: 50_000
+        sstb_self_employment_income: 50_000
+        w2_wages_from_qualified_business: 100_000
+        # Zero out QBI deductions so the test isolates SSTB / non-SSTB routing
+        # rather than SE-tax / health-insurance / pension ALD pro-rating.
+        self_employment_tax_ald_person: 0
+        self_employed_health_insurance_ald_person: 0
+        self_employed_pension_contribution_ald_person: 0
+        is_tax_unit_head: true
+    tax_units:
+      tax_unit:
+        members: [person1]
+    families:
+      family:
+        members: [person1]
+    spm_units:
+      spm_unit:
+        members: [person1]
+    households:
+      household:
+        members: [person1]
+        state_fips: 6
+  output:
+    # Single 2025 threshold $197,300, length $50,000.
+    # Taxable income is far above the phaseout, so applicable rate = 0.
+    # Non-SSTB QBI = $50,000; W-2 cap = 0.50 * $100,000 = $50,000.
+    #   Non-SSTB component = min(20% * $50k, $50k) = $10,000.
+    # SSTB QBI = $50,000; SSTB component fully phased out = $0.
+    qualified_business_income_deduction: 10_000
+
+- name: Pure SSTB below threshold gets full 20 percent deduction
+  absolute_error_margin: 1
+  period: 2025
+  input:
+    people:
+      person1:
+        employment_income: 50_000
+        business_is_qualified: false
+        sstb_self_employment_income: 30_000
+        # Zero out QBI deductions to isolate SSTB routing.
+        self_employment_tax_ald_person: 0
+        self_employed_health_insurance_ald_person: 0
+        self_employed_pension_contribution_ald_person: 0
+        is_tax_unit_head: true
+    tax_units:
+      tax_unit:
+        members: [person1]
+    families:
+      family:
+        members: [person1]
+    spm_units:
+      spm_unit:
+        members: [person1]
+    households:
+      household:
+        members: [person1]
+        state_fips: 6
+  output:
+    # Below the $197,300 single threshold so the SSTB phaseout does not apply.
+    # SSTB QBI component = 0.20 * $30,000 = $6,000.
+    qualified_business_income_deduction: 6_000

policyengine_us/tests/policy/baseline/gov/irs/income/taxable_income/deductions/qbid/sstb_qualified_business_income.yaml

@@ -0,0 +1,54 @@
+- name: SSTB SE income only, no deductions
+  period: 2026
+  input:
+    sstb_self_employment_income: 100_000
+    self_employment_tax_ald_person: 0
+    self_employed_health_insurance_ald_person: 0
+    self_employed_pension_contribution_ald_person: 0
+  output:
+    sstb_qualified_business_income: 100_000
+
+- name: SSTB SE income with would_be_qualified flag false
+  period: 2026
+  input:
+    sstb_self_employment_income: 100_000
+    sstb_self_employment_income_would_be_qualified: false
+    self_employment_tax_ald_person: 0
+    self_employed_health_insurance_ald_person: 0
+    self_employed_pension_contribution_ald_person: 0
+  output:
+    sstb_qualified_business_income: 0
+
+- name: SSTB SE income still counts when business_is_qualified is false
+  period: 2026
+  input:
+    business_is_qualified: false
+    sstb_self_employment_income: 100_000
+    self_employment_tax_ald_person: 0
+    self_employed_health_insurance_ald_person: 0
+    self_employed_pension_contribution_ald_person: 0
+  output:
+    sstb_qualified_business_income: 100_000
+
+- name: Mixed SSTB and non-SSTB SE income, deductions pro-rated by gross share
+  period: 2026
+  input:
+    self_employment_income: 30_000
+    sstb_self_employment_income: 70_000
+    self_employment_tax_ald_person: 1_000
+    self_employed_health_insurance_ald_person: 0
+    self_employed_pension_contribution_ald_person: 0
+  output:
+    # SSTB share = 70_000 / 100_000 = 0.7
+    # SSTB QBI = 70_000 - 0.7 * 1_000 = 69_300
+    sstb_qualified_business_income: 69_300
+
+- name: No SSTB SE income returns zero
+  period: 2026
+  input:
+    self_employment_income: 50_000
+    self_employment_tax_ald_person: 1_000
+    self_employed_health_insurance_ald_person: 0
+    self_employed_pension_contribution_ald_person: 0
+  output:
+    sstb_qualified_business_income: 0

policyengine_us/tests/policy/baseline/gov/irs/self_employment/taxable_self_employment_income.yaml

@@ -45,3 +45,13 @@
     # Both Schedule C ($50k) and K-1 Box 14 ($30k) are subject to SE tax.
     # 80_000 * (1 - 0.5 * 0.153) = 80_000 * 0.9235 = 73_880
     taxable_self_employment_income: 73_880
+
+- name: SSTB self-employment income is subject to SE tax.
+  period: 2024
+  input:
+    self_employment_income: 50_000
+    sstb_self_employment_income: 30_000
+  output:
+    # Both non-SSTB ($50k) and SSTB ($30k) Schedule C income are subject to SE tax.
+    # 80_000 * (1 - 0.5 * 0.153) = 80_000 * 0.9235 = 73_880
+    taxable_self_employment_income: 73_880

policyengine_us/tests/policy/baseline/gov/states/mo/tax/income/deductions/mo_business_income_deduction.yaml

@@ -30,3 +30,14 @@
     state_code: MO
   output:
     mo_business_income_deduction: 0
+
+- name: 2023 SSTB-only qualified business income
+  period: 2023
+  input:
+    sstb_self_employment_income: 10_000
+    self_employment_tax_ald_person: 0
+    self_employed_health_insurance_ald_person: 0
+    self_employed_pension_contribution_ald_person: 0
+    state_code: MO
+  output:
+    mo_business_income_deduction: 2_000

policyengine_us/tests/policy/baseline/household/income/household/household_market_income.yaml

@@ -34,6 +34,18 @@
   output:
     household_market_income: 50_000
 
+- name: SSTB self-employment income is market income
+  period: 2026
+  input:
+    people:
+      person:
+        sstb_self_employment_income: 50_000
+    households:
+      household:
+        members: [person]
+  output:
+    household_market_income: 50_000
+
 - name: Employment income plus UC does not double count
   period: 2026
   input:

policyengine_us/tests/policy/contrib/taxsim/outputs/taxsim_outputs.yaml

@@ -209,6 +209,32 @@
     taxsim_sbusinc: 50000
     taxsim_scorp: 150000
 
+- name: SSTB self-employment income contributes to TAXSIM QBI outputs
+  period: 2024
+  input:
+    people:
+      head:
+        age: 50
+        sstb_self_employment_income: 100000
+        self_employment_tax_ald_person: 0
+        self_employed_health_insurance_ald_person: 0
+        self_employed_pension_contribution_ald_person: 0
+        is_tax_unit_head: true
+      spouse:
+        age: 48
+        sstb_self_employment_income: 50000
+        self_employment_tax_ald_person: 0
+        self_employed_health_insurance_ald_person: 0
+        self_employed_pension_contribution_ald_person: 0
+        is_tax_unit_spouse: true
+    tax_units:
+      tax_unit:
+        members: [head, spouse]
+        filing_status: JOINT
+  output:
+    taxsim_pbusinc: 100000
+    taxsim_sbusinc: 50000
+
 - name: State code NY - TAXSIM outputs
   period: 2024
   input:

policyengine_us/variables/contrib/taxsim/taxsim_pbusinc.py

@@ -10,6 +10,8 @@ class taxsim_pbusinc(Variable):
 
     def formula(tax_unit, period, parameters):
         person = tax_unit.members
-        qbi = person("qualified_business_income", period)
+        qbi = person("qualified_business_income", period) + person(
+            "sstb_qualified_business_income", period
+        )
         is_head = person("is_tax_unit_head", period)
         return tax_unit.sum(qbi * is_head)