Fix WI CDCC to use state expense limits ($10k/individual) for 2024+

[MaxGhenis]

Summary

Fixes Wisconsin's child and dependent care credit (wi_childcare_expense_credit) to use the state-specific expense limit enacted by 2023 Wisconsin Act 101.

The bug: For 2024+, the WI formula used cdcc_potential * 1.0, which inherits the federal expense limits ($3,000 for one qualifying individual, $6,000 for two or more). Wisconsin Statute §71.07(9g)(c)5 sets a $10,000 per qualifying individual limit for tax years beginning after December 31, 2023.

Impact: A Wisconsin family with one child and $7,000 in childcare expenses would receive a $400 credit under the old code (federal $3,000 cap × 20% rate) vs. the correct $1,400 (WI $7,000 cap × 20% rate).

Closes #7684

Changes

• New parameter: gov.states.wi.tax.income.credits.childcare_expense.max_expense — 0 for pre-2024 years (meaning use federal approach), $10,000 for 2024+
• Updated formula: wi_childcare_expense_credit — for 2024+, recomputes relevant expenses using the WI per-individual limit, then applies the federal CDCC rate and the WI fraction (1.0 for 2024+)
• Updated tests: Expands from 2 tests to 6, covering pre-2024 behavior and 2024+ scenarios (expenses under federal limit, between federal and WI limit, above WI limit, single and two-child cases)

Test plan

• All 6 YAML tests pass: uv run policyengine-core test policyengine_us/tests/policy/baseline/gov/states/wi/tax/income/wi_childcare_expense_credit.yaml -c policyengine_us
• Pre-2024 behavior unchanged (formula falls through to cdcc_potential * fraction)
• 2024+ with expenses > federal limit but < WI limit correctly produces higher credit
• 2024+ with expenses > WI limit correctly caps at $10,000 * count_eligible

Legislative reference

Wisconsin Statute § 71.07(9g)(c)5 (2023 Wisconsin Act 101):

"For taxable years beginning after December 31, 2023, the amount under par. (b) is the applicable percentage under section 21 (a) (2) of the Internal Revenue Code of the employment-related expenses, as defined in section 21 (b) (2) of the Internal Revenue Code, except that the dollar limit on employment-related expenses per qualifying individual is $10,000 instead of the dollar limit under section 21 (c) of the Internal Revenue Code."

Source: https://docs.legis.wisconsin.gov/statutes/statutes/71/i/07/9g

🤖 Generated with Claude Code

[codecov]

Codecov Report

✅ All modified and coverable lines are covered by tests.
✅ Project coverage is 100.00%. Comparing base (55a0045) to head (1b3dd39).
⚠️ Report is 37 commits behind head on main.

Additional details and impacted files

@@             Coverage Diff             @@
##             main     #7688      +/-   ##
===========================================
+ Coverage   97.82%   100.00%   +2.17%     
===========================================
  Files           3         1       -2     
  Lines          92        23      -69     
  Branches        2         1       -1     
===========================================
- Hits           90        23      -67     
+ Misses          1         0       -1     
+ Partials        1         0       -1     

Flag	Coverage Δ
unittests	100.00% <100.00%> (+2.17%)	⬆️

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[DTrim99]

PR Review

🔴 Critical (Must Fix)

1. Reference format error in wi_childcare_expense_credit.py:10-14 - The reference tuple is missing commas between strings, causing Python to silently concatenate all URLs into one invalid string:

   # Current (broken):
   reference = (
       "https://..."
       "https://..."  # No comma - strings concatenate!
   )
   
   # Should be:
   reference = (
       "https://...",
       "https://...",  # Comma makes it a tuple
   )

🟡 Should Address

1. Typo in existing parameter - fraction.yaml:1 has "faction" instead of "fraction" in description
2. PDF reference missing page number - max_expense.yaml reference to WI-2441 Instructions should include #page=X to point to specific page with the $10,000 value
3. Parameter description format - max_expense.yaml description contains multiple sentences and embeds the specific value ($10,000); consider simplifying to one sentence

🟢 Suggestions

1. Consider adding deeper anchor to statute URL if available (currently links to section 9g, could potentially link directly to subsection (c)5)
2. Consider adding test for earned income limitation scenario (where min_head_spouse_earned < expenses)
3. Consider adding boundary test for exactly $10,000 limit

---

Validation Summary

Check	Result
Regulatory Accuracy	✅ Correct - $10,000/individual matches WI Statute §71.07(9g)(c)5
Effective Date	✅ Correct - 2024-01-01 matches "tax years beginning after Dec 31, 2023"
Reference Quality	⚠️ 1 critical issue (tuple format), 1 warning (missing page #)
Code Patterns	✅ No hard-coded values, proper vectorization
Test Coverage	✅ Good - 6 tests covering pre-2024, 2024+ scenarios
CI Status	✅ All checks passing

Regulatory Verification

The implementation correctly reflects Wisconsin Statute §71.07(9g)(c)5 as enacted by 2023 Wisconsin Act 101:

• ✅ $10,000 per qualifying individual limit (replacing federal $3,000/$6,000)
• ✅ Effective for tax years beginning after December 31, 2023
• ✅ Uses federal CDCC rate per IRC §21(a)(2)
• ✅ Applies earned income limitation per IRC §21(d)(1)
• ✅ Correctly uses capped_count_cdcc_eligible (max 2 individuals = $20,000 cap)

Next Steps

To auto-fix issues: /fix-pr 7688

Or address manually:

1. Add commas to the reference tuple in wi_childcare_expense_credit.py
2. Fix "faction" → "fraction" typo in fraction.yaml (pre-existing issue)

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🤖 Review generated by Claude Code