Add Washington Senior Citizens and Disabled Persons Property Tax Exemption

[hua7450]

Summary

Implements Washington's Senior Citizens and Disabled Persons Property Tax Exemption Program in PolicyEngine-US (RCW 84.36.381–.389; WAC 458-16A).

Closes #8160

Regulatory Authority

• RCW 84.36.381 — Eligibility and tier benefit rules
• RCW 84.36.383 — Definitions, combined disposable income, county thresholds
• WAC 458-16A — Administrative rules
• DOR Property Tax Exemption Brochure (PT0017) — Program overview

Program Overview

• Administration: Washington Department of Revenue + county assessors
• Type: Property tax exemption (reduces the property tax bill; not a cash benefit paid to the household)
• Indexing: County thresholds adjust triennially beginning Aug 1, 2023 (not annual)

Eligibility

Modeled as wa_pte_eligible (SPMUnit, YEAR), gated on three conditions:

Requirement	Source	How Modeled
Age 61+ OR retired due to disability	RCW 84.36.381(3)(a)(i)–(ii)	wa_pte_categorical_eligible = (age >= p.age_threshold) | is_disabled. Existing is_disabled boolean covers SSDI/SSI/VA/physician-certified disability; doesn't directly verify "retired from gainful employment" — documented in code comment.
Owner-occupant of primary residence	RCW 84.36.381(1)(a), (2)	add(spm_unit, period, ["real_estate_taxes"]) > 0 — only homeowners pay property tax directly, so a positive value implies ownership.
Combined disposable income ≤ Tier 3 county threshold	RCW 84.36.381(5)(a); RCW 84.36.383(10)	wa_pte_income_eligible = county-keyed tier-3 lookup

Combined Disposable Income (Simplified)

wa_pte_combined_disposable_income (SPMUnit, YEAR) — uses existing PolicyEngine variables only:

• Add-backs (6 categories): AGI + tax_exempt_pension_income + military_basic_pay + veterans_benefits + tax_exempt_social_security + tax_exempt_interest_income
• Deductions: medical_out_of_pocket_expenses + long_term_health_insurance_premiums

Excluded with documented gaps: §121 home-sale gain add-back, depreciation/loss add-back, non-AGI dividend receipts, 11 of 13 itemized medical deduction categories. See income/sources.yaml and income/deductions/sources.yaml for citations.

Income Thresholds (39 counties × 3 tiers × 4 time periods)

Period	Statutory rule	Counties affected
Pre-2020	Flat statewide $30k / $35k / $40k	All 39
2020–2023	45% / 55% / 65% of County Median Household Income	All 39
2024–2026	50% / 60% / 70% of County MHI	All 39
2027–2029	50% / 60% / 70% of County MHI (next triennial)	All 39

Source: DOR Income Thresholds for Senior Citizen and Disabled Persons Property Tax Exemption and Deferral

Example (King County 2024): Tier 1 = $60,000; Tier 2 = $72,000; Tier 3 = $84,000.

wa_pte_tier (SPMUnit, YEAR, int) returns 1/2/3 (lowest income → biggest exemption) or 0 (ineligible by income).

All county-tier threshold values across all 4 time periods verified against official DOR publications — see Verification TODO.

Benefit Calculation (Simplified Levy Approach)

The exemption is modeled as a percentage reduction of total real_estate_taxes (PolicyEngine has no levy-type breakdown):

Tier	Reduction Rate	Statutory Basis	Calibration
Tier 1 (lowest income)	80% of real_estate_taxes	RCW 84.36.381(5)(b)(ii): excess + Part 2 + lid-lift levies + regular-levy exemption on max($60k, 60% AV), no cap	Estimate, no primary source
Tier 2	60%	RCW 84.36.381(5)(b)(i): + regular-levy exemption on max($50k, 35% AV), capped $70k	Estimate, no primary source
Tier 3 (highest qualifying income)	40%	RCW 84.36.381(5)(a): excess + state Part 2 + lid-lift levies only	Supported by DOR 2024 Property Tax Statistics, p. 89: excess + state Part 2 ≈ 39% of typical statewide bill

⚠️ Tier reduction rates are statewide approximations. Actual relief depends on the local mix of regular vs excess levies, which varies by jurisdiction and isn't decomposed in PolicyEngine. The DOR yearbook publishes statewide aggregates ($375.5M total relief, 118,039 claimants in 2024, average $3,181) but does not break out claimant counts or dollars by tier — so Tier 1 (80%) and Tier 2 (60%) cannot be validated with public data and remain estimates. Documented in YAML comments.

wa_senior_disabled_property_tax_exemption (SPMUnit, YEAR, USD) = add(spm_unit, period, ["real_estate_taxes"]) * tier_reduction_rate.

Tax Exemption — Not a Cash Benefit

This program reduces the property tax bill; no cash changes hands. The variable is not wired into spm_unit_benefits or household_state_benefits.yaml, since the household doesn't receive a payment. To capture the tax-side effect (reduced SALT deduction, increased net income), wire as a reduction of real_estate_taxes in a follow-up.

Not Modeled (by design — scope decision)

What	Source	Why Excluded
VA 80%+ disability rating pathway	RCW 84.36.381(3)(b)	User scope; existing veterans_benefits doesn't expose rating granularity
Surviving spouse 57+ pathway	RCW 84.36.381(3)(a)(iii)	User scope; would require new input variable
Valuation freeze	RCW 84.36.381(6); WAC 458-16A-140	User scope; requires longitudinal home value tracking
Full 13-category medical deductions	RCW 84.36.383(2)	User scope; 5–6 missing input variables (Medigap, DME, insulin, nursing home costs, etc.)
Levy-type decomposition	RCW 84.36.381(5)	PE has no levy breakdown — modeled as % of total
Cotenant income aggregation	RCW 84.36.383(2) opening	SPM unit aggregation is the v1 proxy
Annualized partial-year income	RCW 84.36.381(4)(b)–(c)	Not simulatable in calendar-year framework
Care-facility absence exception	RCW 84.36.381(1)(a)(i)–(iii)	Edge case
Parcel acreage cap	RCW 84.36.383(13)	No parcel data
§121 home-sale gain add-back	RCW 84.36.383(7)(a)	capital_gains doesn't decompose; AGI already nets §121 exclusion
Veterans-benefits subcomponent exclusions	RCW 84.36.383(7)(f)	veterans_benefits is a single bucket; can't separate VA disability comp / DIC / attendant-care from taxable portion
Property-tax deferral program	RCW 84.38	Out of scope (separate program)
Reduction of real_estate_taxes / SALT integration	—	Variable computes but isn't wired into property tax / SALT yet

Files

parameters/gov/states/wa/dor/property_tax_exemption/senior_disabled/
├── age_threshold.yaml
├── income/
│   ├── sources.yaml
│   ├── deductions/sources.yaml
│   └── thresholds/{tier_1,tier_2,tier_3}.yaml      # 39 counties × 4 periods
└── benefit/{tier_1,tier_2,tier_3}_reduction_rate.yaml

variables/gov/states/wa/dor/property_tax_exemption/senior_disabled/
├── wa_pte_categorical_eligible.py                  # age 61+ OR is_disabled
├── wa_pte_eligible.py                              # categorical & owner-proxy & income
├── wa_senior_disabled_property_tax_exemption.py    # benefit
└── income/
    ├── wa_pte_combined_disposable_income.py
    ├── wa_pte_income_eligible.py
    └── wa_pte_tier.py

Integration:

• changelog.d/wa-senior-disabled-pte.added.md

Test Plan

• 56 program-specific YAML tests pass
• Microsim regression (CPS 2023, 2024-2025) — variable not consumed by household totals; defined_for filters output to WA only
• Edge cases for income boundaries, county variation, time-period transitions (2019/2022/2024/2028)
• CI passes

Verification TODO

• All county-tier threshold values verified against official DOR publications across all 4 time periods (pre-2020, 2020-2023, 2024-2026, 2027-2029)
• Tier reduction rates: Tier 3 (0.4) supported by DOR 2024 yearbook; Tier 1 (0.8) and Tier 2 (0.6) remain estimates without primary source — refine if DOR publishes tier-level data, or via direct request to DOR Research division
• Wire as a reduction of real_estate_taxes (currently the exemption variable computes but doesn't reduce property tax / federal SALT)
• Disability proxy: is_disabled covers unable-to-work disability across SSA/VA/physician pathways but doesn't directly verify the statute's "retired from gainful employment" condition

[codecov]

Codecov Report

❌ Patch coverage is 73.07692% with 21 lines in your changes missing coverage. Please review.
✅ Project coverage is 70.62%. Comparing base (20705b0) to head (d442275).
⚠️ Report is 38 commits behind head on main.

Files with missing lines	Patch %	Lines
...abled/wa_senior_disabled_property_tax_exemption.py	66.66%	5 Missing ⚠️
...n/senior_disabled/income/wa_pte_income_eligible.py	69.23%	4 Missing ⚠️
...ax_exemption/senior_disabled/income/wa_pte_tier.py	69.23%	4 Missing ⚠️
...ion/senior_disabled/wa_pte_categorical_eligible.py	69.23%	4 Missing ⚠️
...y_tax_exemption/senior_disabled/wa_pte_eligible.py	69.23%	4 Missing ⚠️

Additional details and impacted files

@@             Coverage Diff             @@
##             main    #8161       +/-   ##
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- Coverage   85.36%   70.62%   -14.75%     
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  Files           3     4571     +4568     
  Lines          41    66422    +66381     
  Branches        2      336      +334     
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+ Hits           35    46909    +46874     
- Misses          6    19511    +19505     
- Partials        0        2        +2     

Flag	Coverage Δ
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