- Affected
- The state tax of two-earner married couples was overstated. With income split evenly: by up to about $1,600 in the District of Columbia (at $200,000), $1,017 in Delaware, $751 in Arkansas, $400 in Mississippi, $350 in South Carolina and $259 in Virginia. It affected those states' calculators, refund estimators and comparison pages for married couples, and the joint figures on the District of Columbia, Delaware, Mississippi, South Carolina and Virginia brackets pages. Single filers, and couples with one earner, were not affected; the robustness statistic did not move.
- Cause
- The engine took a joint return as one income and had no way to know how it divides between the spouses. The District of Columbia (Calculation J), Delaware (30 Del. C. § 1108), Mississippi (the combined return) and Arkansas (filing status 4) let a couple figure each spouse's tax separately on the same return, Virginia gives two-earner couples a spouse tax adjustment of up to $259, and South Carolina a two wage earner credit of up to $350 (S.C. Code 12-6-3330). Delaware's option was declared as unmodelled in our log; the others were not mentioned at all. It surfaced while correcting Missouri's joint return the same day.
- Fix
- The engine now takes the share of income each spouse earns. For the four with a separate computation it computes both and keeps the lower; Virginia's adjustment follows the state worksheet and South Carolina's credit the statute; in the District the joint $32,200 deduction, and in Mississippi the joint deduction and exemption, are divided between the spouses to equalise their taxable incomes, which is the best allocation when both use the same table. Missouri, where each spouse is always taxed on his or her own share, now uses the actual split instead of assuming an even one. The calculators ask how the income splits (even, 60/40, 75/25, 90/10 or one earner); pages that print a joint figure assume an even split and say so, and their marriage sections now compute each split separately.
- Test
- Tests reproduce the Virginia instructions' own example ($220 adjustment), check the $259 cap and the South Carolina credit at several splits, check that the District and Delaware separate computations equal the sum of two single-filer computations with the deduction divided as the rules allow, that the separate option is never more expensive than the joint return, and that Missouri splits taxable income by each spouse's share.