Childcare subsidy programs should use *_before_lsr income variables to avoid LSR circular dependency

changelog_entry.yaml

@@ -0,0 +1,5 @@
+- bump: patch
+  changes:
+    fixed:
+    - Updated CA CalWORKs, CO CCAP, NE Child Care, and NC SCCA to use *_before_lsr income variables to avoid circular dependency issues in microsimulation.
+    - SNAP dependent care deduction now uses childcare_expenses (net of subsidies) instead of pre_subsidy_childcare_expenses.

policyengine_us/parameters/gov/household/expense/childcare/subsidy_programs.yaml

@@ -0,0 +1,14 @@
+description: States with modeled child care subsidy programs that reduce out-of-pocket childcare expenses.
+values:
+  2020-01-01:
+  # With this list parameter, we don't need the wrapper variables anymore. Keep existing ones for API partner 
+    - ca_child_care_subsidies
+    - co_child_care_subsidies
+    - ma_child_care_subsidies
+    - nc_scca
+    - ne_child_care_subsidies
+
+metadata:
+  unit: list
+  period: year
+  label: Child care subsidy programs

policyengine_us/parameters/gov/states/co/ccap/income/countable_sources.yaml

@@ -0,0 +1,26 @@
+description: Colorado includes these income sources as countable income under the Child Care Assistance Program.
+values:
+  2020-01-01:
+    # Earned income (before LSR to avoid circular dependency)
+    - employment_income_before_lsr
+    - self_employment_income_before_lsr
+    # Unearned income
+    - social_security
+    - pension_income
+    - veterans_benefits
+    - dividend_income
+    - interest_income
+    - rental_income
+    - alimony_income
+    - child_support_received
+    # Excluded per 3.111(J): SSI, children's earnings
+
+metadata:
+  unit: list
+  period: year
+  label: Colorado CCAP countable income sources
+  reference:
+    - title: 8 CCR 1403-1-3.111(I) - Income Inclusions
+      href: https://www.sos.state.co.us/CCR/GenerateRulePdf.do?ruleVersionId=11042&fileName=8%20CCR%201403-1#page=23
+    - title: 1400 CO Code Regs 8 CCR 1403-1-3.111
+      href: https://regulations.justia.com/states/colorado/1400/1403/rule-8-ccr-1403-1/applicant-rights/section-8-ccr-1403-1-3-111/

policyengine_us/parameters/gov/states/nc/ncdhhs/scca/income/sources.yaml

@@ -2,21 +2,23 @@ description: North Carolina counts these sources as gross income for its Subsidi
 
 values:
   2024-08-01:
-  - employment_income
-  - self_employment_income
-  - pension_income
-  - veterans_benefits
-  - unemployment_compensation
-  - disability_benefits
-  - workers_compensation
-  - social_security
-  - retirement_distributions
-  - rental_income
-  - child_support_received
-  - alimony_income
-  - dividend_income
-  - interest_income
-  - miscellaneous_income
+    # Earned income (before LSR to avoid circular dependency)
+    - employment_income_before_lsr
+    - self_employment_income_before_lsr
+    # Unearned income
+    - pension_income
+    - veterans_benefits
+    - unemployment_compensation
+    - disability_benefits
+    - workers_compensation
+    - social_security
+    - retirement_distributions
+    - rental_income
+    - child_support_received
+    - alimony_income
+    - dividend_income
+    - interest_income
+    - miscellaneous_income
 
 metadata:
   unit: list

policyengine_us/parameters/gov/states/ne/dhhs/child_care_subsidy/income/countable_sources.yaml

@@ -0,0 +1,22 @@
+description: Nebraska includes these income sources as countable income under the Child Care Subsidy Program.
+values:
+  2021-01-01:
+    # Earned income (before LSR to avoid circular dependency)
+    - employment_income_before_lsr
+    - self_employment_income_before_lsr
+    # Unearned income per NAC 392-2-010
+    - social_security
+    - child_support_received
+    - unemployment_compensation
+    - pension_income
+    - alimony_income
+    # Excluded per NAC 392-2-010: children's earnings (age 18 or younger in school),
+    # Title I WIOA program income
+
+metadata:
+  unit: list
+  period: year
+  label: Nebraska Child Care Subsidy countable income sources
+  reference:
+    - title: NAC 392-2-010 - Income
+      href: https://dhhs.ne.gov/Guidance%20Docs/Title%20392%20-%20Child%20Care%20Subsidy.pdf#page=3

policyengine_us/tests/policy/baseline/gov/states/ca/cdss/tanf/child_care/ca_calworks_child_care_integration.yaml

@@ -5,7 +5,7 @@
       parent:
         is_child: false
         ca_calworks_child_care_welfare_to_work: 0
-        earned_income: 0
+        earned_income_before_lsr: 0
       child:
         is_child: true
         age: 12
@@ -28,7 +28,7 @@
       parent:
         is_child: false
         ca_calworks_child_care_welfare_to_work: 0
-        earned_income: 1
+        earned_income_before_lsr: 1
       child1:
         is_child: true
         age: 3
@@ -55,7 +55,7 @@
       parent:
         is_child: false
         ca_calworks_child_care_welfare_to_work: 1
-        earned_income: 0
+        earned_income_before_lsr: 0
       child:
         is_child: true
         age: 12

policyengine_us/tests/policy/baseline/gov/states/ca/cdss/tanf/child_care/eligibility/ca_calworks_child_care_eligible.yaml

@@ -48,10 +48,10 @@
 - name: Integration test - every person has to be eligible based on immigration status
   period: 2023
   input:
-    people: 
+    people:
       person1:
         immigration_status: CITIZEN
-        earned_income: 1_000
+        earned_income_before_lsr: 1_000
       person2:
         immigration_status: ASYLEE
         age: 2
@@ -72,7 +72,7 @@
     people: 
       person1:
         immigration_status: UNDOCUMENTED
-        earned_income: 1_000
+        earned_income_before_lsr: 1_000
       person2:
         immigration_status: ASYLEE
         age: 2

policyengine_us/tests/policy/baseline/gov/states/ca/cdss/tanf/child_care/eligibility/ca_calworks_child_care_meets_work_requirement.yaml

@@ -4,7 +4,7 @@
     people:
       person:
         ca_calworks_child_care_welfare_to_work: 0
-        earned_income: 1_000
+        earned_income_before_lsr: 1_000
     households:
       household:
         members: [person]
@@ -18,7 +18,7 @@
     people:
       person:
         ca_calworks_child_care_welfare_to_work: 20
-        earned_income: 0
+        earned_income_before_lsr: 0
     households:
       household:
         members: [person]
@@ -32,7 +32,7 @@
     people:
       person:
         ca_calworks_child_care_welfare_to_work: 0
-        earned_income: 0
+        earned_income_before_lsr: 0
     households:
       household:
         members: [person]

policyengine_us/tests/policy/baseline/gov/states/ca/cdss/tanf/integration.yaml

@@ -4,7 +4,7 @@
     people:
       parent:
         age: 30
-        employment_income: 9_600
+        employment_income_before_lsr: 9_600
       child1:
         age: 4
     spm_units:
@@ -36,7 +36,7 @@
     people:
       parent:
         age: 30
-        employment_income: 12_000
+        employment_income_before_lsr: 12_000
       child1:
         age: 2
       child2:

policyengine_us/tests/policy/baseline/gov/states/nc/ncdhhs/scca/nc_scca_countable_income.yaml

@@ -2,8 +2,8 @@
   period: 2024
   input:
     state_code: NC
-    employment_income: 0
-    self_employment_income: 0
+    employment_income_before_lsr: 0
+    self_employment_income_before_lsr: 0
     pension_income: 0
     veterans_benefits: 0
     unemployment_compensation: 0
@@ -24,8 +24,8 @@
   period: 2024
   input:
     state_code: NC
-    employment_income: 1_000
-    self_employment_income: 1_000
+    employment_income_before_lsr: 1_000
+    self_employment_income_before_lsr: 1_000
     pension_income: 1_000
     veterans_benefits: 1_000
     unemployment_compensation: 1_000

policyengine_us/tests/policy/baseline/gov/states/ne/dhhs/child_care_subsidy/ne_child_care_subsidy.yaml

@@ -4,7 +4,7 @@
     ne_child_care_subsidy_eligible: true
     spm_unit_pre_subsidy_childcare_expenses: 50
     spm_unit_fpg: 100
-    spm_unit_net_income: 100
+    ne_child_care_subsidy_countable_income: 100
     state_code: NE
   output:
     ne_child_care_subsidy: 50
@@ -15,7 +15,7 @@
     ne_child_care_subsidy_eligible: true
     spm_unit_pre_subsidy_childcare_expenses: 50
     spm_unit_fpg: 100
-    spm_unit_net_income: 200
+    ne_child_care_subsidy_countable_income: 200
     state_code: NE
   output:
     ne_child_care_subsidy: 36 # 50 - 0.07 * 200
@@ -26,7 +26,7 @@
     ne_child_care_subsidy_eligible: true
     spm_unit_pre_subsidy_childcare_expenses: 50
     spm_unit_fpg: 100
-    spm_unit_net_income: 2_000
+    ne_child_care_subsidy_countable_income: 2_000
     state_code: NE
   output:
     ne_child_care_subsidy: 0 # 50 - 0.07 * 2000 < 0
@@ -37,7 +37,7 @@
     ne_child_care_subsidy_eligible: false
     spm_unit_pre_subsidy_childcare_expenses: 50
     spm_unit_fpg: 100
-    spm_unit_net_income: 100
+    ne_child_care_subsidy_countable_income: 100
     state_code: NE
   output:
     ne_child_care_subsidy: 0

policyengine_us/tests/policy/baseline/gov/states/ne/dhhs/child_care_subsidy/ne_child_care_subsidy_income_eligible.yaml

@@ -2,7 +2,7 @@
   period: 2024
   input:
     spm_unit_fpg: 100
-    adjusted_gross_income: 185
+    ne_child_care_subsidy_countable_income: 185
     state_code: NE
   output:
     ne_child_care_subsidy_income_eligible: true
@@ -11,7 +11,7 @@
   period: 2024
   input:
     spm_unit_fpg: 100
-    adjusted_gross_income: 183
+    ne_child_care_subsidy_countable_income: 183
     state_code: NE
   output:
     ne_child_care_subsidy_income_eligible: true
@@ -20,7 +20,7 @@
   period: 2024
   input:
     spm_unit_fpg: 100
-    adjusted_gross_income: 186
+    ne_child_care_subsidy_countable_income: 186
     state_code: NE
   output:
     ne_child_care_subsidy_income_eligible: false

policyengine_us/tests/policy/baseline/household/expense/childcare/childcare_expenses.yaml

@@ -13,3 +13,19 @@
     co_child_care_subsidies: 25
   output:
     childcare_expenses: 0
+
+- name: NC SCCA subsidy (annual)
+  period: 2024
+  input:
+    pre_subsidy_childcare_expenses: 1_200
+    nc_scca: 600  # Annual subsidy amount
+  output:
+    childcare_expenses: 600  # 1_200 - 600 = 600
+
+- name: NC SCCA subsidy (monthly)
+  period: 2024-01
+  input:
+    pre_subsidy_childcare_expenses: 1_200  # Annual input
+    nc_scca: 600  # Annual input
+  output:
+    childcare_expenses: 50  # Monthly: (1_200 - 600) / 12 = 50

policyengine_us/variables/gov/irs/income/taxable_income/adjusted_gross_income/irs_gross_income/earned_income/earned_income_before_lsr.py

@@ -0,0 +1,17 @@
+from policyengine_us.model_api import *
+
+
+class earned_income_before_lsr(Variable):
+    value_type = float
+    entity = Person
+    label = "Earned income (before labor supply response)"
+    unit = USD
+    documentation = (
+        "Income from wages or self-employment, before behavioral responses"
+    )
+    definition_period = YEAR
+
+    adds = [
+        "employment_income_before_lsr",
+        "self_employment_income_before_lsr",
+    ]

policyengine_us/variables/gov/states/ca/cdss/tanf/child_care/eligibility/ca_calworks_child_care_meets_work_requirement.py

@@ -14,6 +14,6 @@ def formula(spm_unit, period, parameters):
         welfare_to_work = person(
             "ca_calworks_child_care_welfare_to_work", period
         )
-        earned = person("earned_income", period)
+        earned = person("earned_income_before_lsr", period)
         eligible_person = (welfare_to_work + earned) > 0
         return spm_unit.any(eligible_person)

policyengine_us/variables/gov/states/co/ccap/co_ccap_countable_income.py

@@ -5,8 +5,8 @@ class co_ccap_countable_income(Variable):
     value_type = float
     entity = SPMUnit
     definition_period = MONTH
-    label = "Colorado Child Care Assitance Program Countable Income"
-    reference = "https://www.sos.state.co.us/CCR/GenerateRulePdf.do?ruleVersionId=11042&fileName=8%20CCR%201403-1#page=22"
+    label = "Colorado Child Care Assistance Program Countable Income"
+    reference = "https://regulations.justia.com/states/colorado/1400/1403/rule-8-ccr-1403-1/applicant-rights/section-8-ccr-1403-1-3-111/"
     unit = USD
-    # TODO: Use income components from the manual.
-    adds = ["snap_earned_income", "snap_unearned_income"]
+
+    adds = "gov.states.co.ccap.income.countable_sources"

policyengine_us/variables/gov/states/ne/dhhs/child_care_subsidy/ne_child_care_subsidy.py

@@ -14,7 +14,7 @@ def formula(spm_unit, period, parameters):
         childcare_expenses = spm_unit(
             "spm_unit_pre_subsidy_childcare_expenses", period
         )
-        income = spm_unit("spm_unit_net_income", period)
+        income = spm_unit("ne_child_care_subsidy_countable_income", period)
         fpg = spm_unit("spm_unit_fpg", period)
         fpg_fraction = fpg * p.fpg_fraction.fee_free_limit
         income_above_fpg_fraction = income > fpg_fraction

policyengine_us/variables/gov/states/ne/dhhs/child_care_subsidy/ne_child_care_subsidy_countable_income.py

@@ -0,0 +1,13 @@
+from policyengine_us.model_api import *
+
+
+class ne_child_care_subsidy_countable_income(Variable):
+    value_type = float
+    entity = SPMUnit
+    label = "Nebraska Child Care Subsidy countable income"
+    unit = USD
+    definition_period = YEAR
+    reference = "https://dhhs.ne.gov/Guidance%20Docs/Title%20392%20-%20Child%20Care%20Subsidy.pdf"
+    defined_for = StateCode.NE
+
+    adds = "gov.states.ne.dhhs.child_care_subsidy.income.countable_sources"

policyengine_us/variables/gov/states/ne/dhhs/child_care_subsidy/ne_child_care_subsidy_income_eligible.py

@@ -16,7 +16,7 @@ def formula(spm_unit, period, parameters):
         p = parameters(
             period
         ).gov.states.ne.dhhs.child_care_subsidy.fpg_fraction
-        income = add(spm_unit, period, ["adjusted_gross_income"])
+        income = spm_unit("ne_child_care_subsidy_countable_income", period)
         fpg = spm_unit("spm_unit_fpg", period)
         income_limit = fpg * p.initial_eligibility
         return income <= income_limit

policyengine_us/variables/gov/usda/snap/income/deductions/snap_dependent_care_deduction.py

@@ -10,8 +10,7 @@ class snap_dependent_care_deduction(Variable):
     definition_period = MONTH
     reference = "https://www.law.cornell.edu/uscode/text/7/2014#e_3"
 
-    # Use pre-subsidy expenses to avoid circular dependency
-    # (childcare subsidies depend on income, which would create a
-    # circular dependency if SNAP deductions depended on subsidized
-    # childcare expenses).
-    adds = ["pre_subsidy_childcare_expenses"]
+    # Use childcare_expenses (net of subsidies) - this is policy-correct
+    # as families should only deduct expenses they actually pay.
+    # Childcare subsidies use *_before_lsr income to avoid LSR cycle.
+    adds = ["childcare_expenses"]