SC H.3492 Partially Refundable EITC Analysis Notebooks

[DTrim99]

Summary

Create analysis notebooks for South Carolina H.3492 - the partially refundable EITC reform. This reform makes 25% of the excess SC EITC (above state tax liability) refundable.

Bill Reference: SC H.3492 (126th Session, 2025-2026)

policyengine-us PR: PolicyEngine/policyengine-us#7189

Key Formula

• SC EITC = 125% × Federal EITC (unchanged from current law)
• If SC EITC > state tax liability:
  • Non-refundable portion = tax liability
  • Refundable portion = 25% × (SC EITC - tax liability)

Deliverables

1. Microsimulation Notebook (sc_h3492_microsimulation.ipynb)

Calculate aggregate impacts including:

• Total cost of the reform
• Number of beneficiary households
• Average benefit per household
• Winners/losers analysis
• Poverty impact (overall and child poverty)
• Impact by income bracket

Reform Setup:
```python
from policyengine_us.reforms.states.sc.h3492.sc_h3492_eitc_refundable import sc_h3492_eitc_refundable
from policyengine_us import Microsimulation

baseline = Microsimulation()
baseline.default_year = 2025

reformed = Microsimulation(reform=sc_h3492_eitc_refundable)
reformed.default_year = 2025
```

Key Metrics to Calculate:
```python

Baseline vs Reformed

metrics = [
'household_net_income',
'state_income_tax',
'sc_income_tax',
'sc_refundable_credits',
'sc_non_refundable_credits',
]

Reform-specific variables

reform_metrics = [
'sc_h3492_total_eitc',
'sc_h3492_eitc_non_refundable',
'sc_h3492_eitc_refundable',
]
```

Income Bracket Analysis:

• Under $25k
• $25k-$50k
• $50k-$75k
• $75k-$100k
• Over $100k

2. Household Impact Notebook (sc_h3492_household_example.ipynb)

Show impact for a specific household: Single parent with one child earning $20,000

Situation:
```python
from policyengine_us import Simulation
from policyengine_us.reforms.states.sc.h3492.sc_h3492_eitc_refundable import sc_h3492_eitc_refundable

situation = {
'people': {
'parent': {
'age': {'2025': 30},
'employment_income': {'2025': 20_000}
},
'child': {
'age': {'2025': 5}
}
},
'tax_units': {
'tax_unit': {
'members': ['parent', 'child'],
'filing_status': {'2025': 'HEAD_OF_HOUSEHOLD'}
}
},
'families': {
'family': {
'members': ['parent', 'child']
}
},
'spm_units': {
'spm_unit': {
'members': ['parent', 'child']
}
},
'households': {
'household': {
'members': ['parent', 'child'],
'state_code': {'2025': 'SC'}
}
}
}

baseline = Simulation(situation=situation)
reformed = Simulation(situation=situation, reform=sc_h3492_eitc_refundable)
```

Variables to Display:

Variable	Baseline	Reformed	Change
Federal EITC
SC EITC (total)
SC tax liability
SC non-refundable credits
SC refundable credits
SC income tax
Household net income

Expected Results for $20,000 single parent:

• Federal EITC: ~$3,584 (approximate for 1 child)
• SC EITC: 125% × $3,584 = ~$4,480
• SC tax liability: Very low or $0 at this income
• If tax liability = $0:
  • Non-refundable portion: $0
  • Refundable portion: 25% × $4,480 = ~$1,120

Reference Implementation

Based on the ri-ctc-calculator microsimulation.py approach for aggregate impact calculations.

Notes

• The reform applies only to South Carolina residents
• Use the enhanced CPS microdata for SC-specific analysis if available, otherwise use standard CPS
• Year should be 2025 (the reform is designed for future tax years)