DE 21Kintrec

[feenberg]

See http://taxsim.nber.org/out2psl/1007

On a Separate/Combined return the Personal Credit (Line 27a) is refundable only to the extent of each individual's tax before credits. PE allows the refund up to the total of both credits, which TA does not.

[DTrim99]

Confirmed — you're right, and thanks for isolating it so cleanly. PolicyEngine reproduces the per-column tax exactly but pools the non-refundable Personal Credit across both columns, which Delaware does not allow on a separate/combined return (Filing Status 4).

Working from the PIT-RES form you attached:

	Column A (spouse)	Column B (you)
Taxable income (L23)	$7,645	$7,645
Tax before credits (L24)	$168	$168
Personal credit (L27a)	$110 (1 exemption)	$220 (2 exemptions)
Credit used (L32)	$110	$168 (capped at own tax)
Balance (L33)	$58	$0

Net Delaware tax = $58. Column B's $220 of personal credit is limited to its own $168 of tax, so the surplus $52 is lost.

PolicyEngine instead computes per-spouse tax before credits of $169.16 each ($338.33 combined), then applies all three exemptions × $110 = $330 against that combined figure, leaving only $8.33. The surplus credit from one column wrongly offsets the other column's tax.

Root cause: PE caps Delaware's non-refundable credits (personal credit, aged personal credit, CDCC, non-refundable EITC) against the combined tax-unit liability rather than each spouse's own tax before credits when the return is filed separate/combined. We're opening an issue in policyengine-us to cap these per column. I'll link it here.

[DTrim99]

Issue opened: PolicyEngine/policyengine-us#8710.