Apply Colorado, Connecticut, Illinois and Indiana rules for a filer who can be claimed as a dependent

[MaxGhenis]

Summary

Absent the filing exception described below, a return on which the filer, or on a joint return either spouse, can be claimed as a dependent on another return has no dependents (IRC 152(b)(1); Publication 501, Dependent Taxpayer Test), and a childless filer who can be claimed gets no EITC (IRC 32(c)(1)(A)(ii)(III)). Colorado, Connecticut, Illinois and Indiana build credits, exemptions and deductions on those rules, but several formulas omitted the required filer-dependency checks.

The federal claimable-filer changes in #10087 merged on 2026-10-16, and this PR now targets main. The rules read the merged federal inputs the way their formulas do: "no dependents" (IRC 152(b)(1)) and the childless EITC bar read head_or_spouse_is_dependent_elsewhere_without_filing_exception, so the Publication 501 exception (the would-be claimant is not required to file and files at most for a refund) restores the dependents; rules that turn on an actual claim read claimed_as_dependent_on_another_return. A companion PR applies the same rules in DC, Georgia and Idaho: #10050.

Formula	Rule now	Source
co_eitc (ITIN and under-25 routes)	No childless credit when either filer can be claimed; a claimable filer with a qualifying child keeps it	C.R.S. 39-22-123.5(2.5) pays the credit the filer "would have been allowed, but for" a missing SSN; (2.7) pays the credit "allowed under section 32 (n)(1)" (HB23-1112, p.2-3). Neither waives the dependency bar.
co_ctc_qualifying_child (2022-2023), co_ctc_eligible_child (2024+)	No child on such a return	2022-2023: a share of the federal credit "a resident individual who claims a federal child tax credit" (HB23-1112, p.4). 2024+: the Department says the child "generally must meet the requirements for the federal child tax credit" (January 2026 guidance, p.2); see reading 1.
co_family_affordability_credit	No child on such a return	Same child test (January 2026 guidance); see reading 1
co_low_income_cdcc	Counts only children under 13 who are federal child care qualifying persons: none on such a return, except a child incapable of self-care	C.R.S. 39-22-119.5(3)(a)(III)-(IV): care for "a dependent of the taxpayer who is less than thirteen years old", and the individual "would be allowed a credit for the expenses under section 21" with enough liability. IRC 21(b)(1)(A) needs a dependent (none on such a return); 21(b)(1)(B) keeps a dependent incapable of self-care "without regard to subsections (b)(1)". See paired reading 1.
ct_property_tax_credit_eligible	Through 2021, the under-65 route needs a dependent the return can validly claim	C.G.S. 12-704c(b)(2): "for the taxable years commencing January 1, 2017, to January 1, 2021, inclusive", only a resident 65 or older or one "validly claiming one or more dependents"
ct_child_tax_rebate	No child on such a return	P.A. 22-118 sec. 411: a child claimed as a dependent on the 2021 federal return (TSSB 2022-5)
il_dependent_exemption	None on such a return	35 ILCS 5/204(c): one for each exemption "allowable ... under Section 151"
il_eitc (ITIN and age-18 extension)	No childless credit when either filer can be claimed	35 ILCS 5/212; 2025 Schedule IL-E/EITC instructions, p.5, question 6: "Can you be claimed as a dependent ... Yes. STOP"
il_ctc	Unchanged in behavior: a claimable filer keeps the credit for their own IRC 152 qualifying child (references and comment corrected to section 244)	35 ILCS 5/244(d): "qualifying child" has its IRC 152 meaning, which needs no allowable dependency; the 2026 draft instructions, p.2 say "at least one qualifying child"; see reading 2
il_income_tax_rebate_eligible, il_income_tax_rebate (2022 rebate on 2021 returns)	A filer actually claimed elsewhere is ineligible (reads the claim input, so a filer who can be claimed but is not keeps it); a joint return keeps $100 while one spouse is not claimed; no per-dependent amount on a return with a claimable filer	P.A. 102-0700 sec. 212.1(a), p.131-132: a taxpayer "who is claimed as a dependent on another individual's return for that year, is ineligible"; see reading 4
in_base_exemptions	Each filer keeps $1,000; dependents count only when no filer can be claimed	Information Bulletin 117, p.2: the own exemption stays "even if the individual can be claimed as a dependent"; 2025 IT-40 instructions, p.24 (state-authored copy; forms.in.gov blocks scripted downloads): "Could you, or your spouse if filing jointly, be claimed as a dependent on someone else's tax return? ... Yes. STOP. You cannot claim any dependents."
in_is_qualifying_dependent_child (additional and adoption exemptions)	No child on such a return	Same
in_nonpublic_school_deduction	None on such a return	Information Bulletin 107, p.1: a child who "qualifies as a dependent" under IRC 152

The contributed Illinois and Indiana dependent exemption reforms replace two of these formulas; at their default parameters they now match the baseline for a claimable filer (Indiana's reform also stops moving a barred child into its personal portion), with regression cases under both joint labellings.

Rows from the audit that need no change here:

• Already zero through the federal branch: Colorado's regular child care credit (co_cdcc reads the federal credit), Connecticut's and Indiana's EITCs (they match federal eitc, gated in Make rules for a filer claimed elsewhere independent of which spouse is labelled head #10024), and the federal student loan interest deduction that all four states start from. YAML cases here confirm the first three.
• Connecticut's post-2021 property credit: the audit flagged an obsolete age/dependent prerequisite from 2022, but age_threshold drops to 0 in 2022, so every filer qualifies, which matches 12-704c(b)(2)'s "2017, to January 1, 2021, inclusive". No bug.
• Illinois' K-12 education credit uses custodian status, not dependency. Its personal exemption remains unchanged pending the statute-versus-instructions choice in reading 3; it is not treated as a resolved input choice.

Not modeled (no new programs here): Colorado's property tax, rent and heat rebate (separate application, "Were you claimed as a dependent"), and Indiana's $200 fallback automatic refund (IC 4-10-22-4.5, actually claimed for 2022).

Readings for Max (queue via the US + core hub)

1. Paired Colorado reading: child tax credit (2024+), family affordability credit, and low-income child care credit for a disabled child. Keep the current code pending Max's choice. It currently bars the CTC and family credit but pays $250 for an under-13 child incapable of self-care: this is the inconsistent pair identified by the review. The two consistent options are:
   • Apply the dependent-taxpayer bar to all three: $0 CTC, $0 family credit and $0 low-income child care credit. Evidence: the Department's January 2026 CTC guidance, p.2 and family credit guidance, p.1 point to federal CTC requirements; Book 104, p.7 generally aligns state and federal dependents. The research lane quotes the 2021-2024 DR 0347 instructions as requiring the taxpayer's dependent under 13 (2021, p.44, 2022, p.46, 2023, p.48, 2024, p.67). C.R.S. 39-22-119.5(2)(b), (3)(a)(III) defines dependent through IRC 152(a)(1) and requires a dependent under 13. Applying IRC 152(b)(1) to that requirement supports $0 even for the disabled child.
   • Use the qualifying-child definitions without the dependent-taxpayer bar: pay both credits ($1,200 CTC and $3,273 family credit in the 2025 test household) and keep the $250 low-income child care credit. Evidence: HB23-1112, p.4 and HB24-1311, p.3 define the child through IRC 152(c); the child care statute's IRC 152(a)(1) reference likewise identifies a qualifying child. The 2025 DR 0347, p.81 points to an individual defined under section 21, whose disabled-person branch disregards IRC 152(b)(1). The 2025 form is the form evidence supporting the $250 reading; the 2021-2024 wording points toward the first option. Applying Book 104's separate custodial-parent discussion to a claimable filer remains an inference.
2. Illinois child tax credit. Keep the current code pending Max's choice. It follows 35 ILCS 5/244(d) and the 2026 draft instructions, p.2 (qualifying child), so a claimable filer keeps $27.20 in the 2025 test household ($13.60 in the review's 2024 probe). The 2024-2025 instructions, p.1 require a child who is the taxpayer's dependent; that reading gives $0 for 2024-2025. Section 244 has not changed since P.A. 103-592 (P.A. 104-417 only fixed a typo). Decide this alongside paired reading 1: the current Illinois and Colorado CTC readings give opposite results for the same qualifying-child statutory phrase.
3. Illinois personal exemption: actual claim versus claimability (newly listed). Keep the current code pending Max's choice. 35 ILCS 5/204(b) says the taxpayer "is claimed" on another person's return, matching the wording this PR reads as an actual claim in section 212.1(a). That reading gives $2,850 for the review's 2025 single filer who can be claimed but is not, with employment income of $10,000. Conversely, IL-1040 Line C says "If someone else can claim you" in both 2021, p.6 and 2025, p.6, supporting the current claimability helpers and $0 in that probe. The 2022 rebate should probably follow the same input choice: its 2021 checkbox has the same claimability wording, while its statute uses the same actual-claim wording. This PR leaves both formulas as they are and asks Max to resolve that tension.
4. Illinois 2022 rebate, one claimed spouse. The exclusion is per taxpayer, so this PR keeps the $100 joint amount (no dependent amount). Alternatives: $50 (the qualifying spouse alone) or $0 (the joint return as one taxpayer, since qualifying spouses are treated as a single taxpayer). Resolve the actual-claim-versus-claimability input with reading 3. Under IRC 152(b)(2), a joint filer can ordinarily be claimed only for a refund-only return, so this is a narrow case.
5. Childless EITC on a joint return (Colorado, Illinois). This PR bars the joint return when either spouse can be claimed without the filing exception, as Make rules for a filer claimed elsewhere independent of which spouse is labelled head #10024 does federally. Publication 596, p.18 says neither spouse can be claimed when claiming the EIC jointly. Illinois' expanded worksheet skips its dependency question for joint filers; reading that omission literally would keep the credit, but a claimable joint return ordinarily exists only under the refund-only exception.
6. Connecticut's 2022 child rebate: review confirms the current input. Section 411(b)(1)'s valid claim and TSSB 2022-5, p.1's proper claim concern the child on the taxpayer's 2021 return. IRC 152(b)(1) and Publication 501, p.11 make allowable dependents turn on filer claimability with the filing exception. The independent review treats this as a confirmed rule rather than a methodology choice.

Invariants

1. Swap invariance. Exchanging the two adults' head/spouse labels leaves every changed output unchanged, including separately drawn actual claims, claimability and filing exceptions.
2. Monotonicity. Marking another filer as claimed never raises a changed output (none of them is capped by a liability the claim can raise).
3. Identities without the filing exception. When head_or_spouse_is_dependent_elsewhere_without_filing_exception is true, the return has no Illinois dependent exemption, Colorado child tax credit, or Indiana additional exemption, and Indiana base exemptions are $1,000 per filer. The refund-only filing exception can restore the dependent exemptions, child credit and dependent portion of Indiana base exemptions; ordinary claimability alone does not imply these identities.
4. Formula comparison when nobody is claimable. Inspection of the changed formulas shows the added claimability gates are inactive when no filer can be claimed. One artificial exception is co_low_income_cdcc: requiring a federal child care qualifying person also excludes a head or spouse under 13 who the old raw-age count included. This is a formula-level observation; aggregate impact awaits the hub run.

Tests

• YAML: variable-named cases for every changed formula: a single claimable filer, a joint return with one claimable spouse under both head/spouse labellings, both spouses claimable, and nobody claimable, plus counterexamples (a claimable filer with a qualifying child keeps the Colorado EITC; a claimable filer aged 65 keeps the Connecticut credit; a two-return household). Expected values come from the statutes and repo parameters. Result: 271 cases passed across all 18 files, each run in its own foreground process with the required thread caps; all processes exited 0.

YAML test file	Passed
co_cdcc.yaml	12
co_low_income_cdcc.yaml	15
co_ctc.yaml	39
co_eitc.yaml	26
co_family_affordability_credit.yaml	9
ct_eitc.yaml	17
ct_property_tax_credit_eligible.yaml	13
ct_child_tax_rebate.yaml	35
il_ctc.yaml	11
il_eitc.yaml	15
il_income_tax_rebate.yaml	14
il_dependent_exemption.yaml	9
in_additional_exemptions.yaml	7
in_base_exemptions.yaml	8
in_eitc.yaml	12
in_nonpublic_school_deduction.yaml	7
il/dependent_exemption_reform_test.yaml	9
in/dependent_exemption_reform_test.yaml	13

• Property test policyengine_us/tests/core/test_claimable_filer_co_ct_il_in_invariants.py reuses check_swap/check_monotone from the federal invariants test in the four states for 2021, 2023, 2025 and 2026: Hypothesis batches check invariants 1 and 3; a seeded population checks 1-3. The generator draws claimability separately, then actual claims only for claimable adults, and draws the filing exception. Identity checks use head_or_spouse_is_dependent_elsewhere_without_filing_exception. Twelve deterministic cases distinguish claimability from actual claims and guarantee filing-exception coverage within the seeded swap simulations. Full Illinois dependent-exemption and Indiana base-exemption equalities check that the exception restores dependents, while Illinois rebate eligibility is checked against actual claims. It covers tax-unit outputs (the person-level family affordability credit only through co_refundable_credits, for swaps), and its generator sets no nonpublic-school attendance, so that deduction is covered by YAML only. It caught a person/tax-unit broadcast in co_low_income_cdcc that one-return YAML cases cannot. Restored result: 5 passed, with no failures and process exit 0, for the complete property file under the required thread caps. Mutation evidence: replacing the without-filing-exception helper with head_or_spouse_is_dependent_elsewhere in il_dependent_exemption made the targeted 2025 seeded-population test fail (1 failed; exit 1) at the Illinois filing-exception restoration identity: the mutated formula returned $0 where $2,850 was required. Restoring the production helper gave the five passing tests above. This demonstrates the Illinois helper mutation specifically.

• Style checks: Ruff 0.15.5 format and check both succeeded (each exited 0).

Microsimulation impact

Pending: the US + core hub adds its impact run here.

Follow-ups

• Colorado's family affordability credit is paused for 2026 and Idaho's child tax credit ended after 2025; both are addressed by Pause Colorado's family affordability credit in 2026 and leave Idaho's expired child tax credit out of 2026 totals #10051. Those parameter changes are independent of this PR's dependency rules, so this PR has no landing-order requirement on Pause Colorado's family affordability credit in 2026 and leave Idaho's expired child tax credit out of 2026 totals #10051.
• Proposed separate issue: align the SB3567 reform's pre-2025 Illinois child tax credit override with baseline eligibility. The review's 2024 claimable-filer probe gives $13.60 in baseline and $0 in the reform; children without an SSN have a related gap. This predates this PR and the reform remains unchanged here.

axiom: TheAxiomFoundation/rulespec-us#1698 queued (CO1: EITC routes, child tax credit, family affordability credit, low-income child care) | TheAxiomFoundation/rulespec-us#1699 queued (IL1: dependent exemption, EITC, child tax credit) | TheAxiomFoundation/rulespec-us#1700 queued (IN1: exemptions, nonpublic school deduction) | CT 12-704c(b)(2) 2017-2021 gate n/a: expired and unencoded | CT P.A. 22-118 sec. 411 rebate n/a: expired and unencoded | IL sec. 212.1 rebate n/a: expired and unencoded; none encoded-correct

Merge with main after #10087

Merge commit 29a702c5f546338a6c350ec335aafee9d479d70a incorporates main after #10087 squash-merged as 2daebf2ca8, with main at 1ef55c1197c6b466912e2f081d548d277e04e360. Conflicts in nm_medical_expense_credit.py, nm_medical_expense_credit.yaml, and ca_cdcc_relevant_expenses.yaml take main's reviewed versions because this PR left all three unchanged from its federal base. Removed the obsolete federal changelog fragments claimable-filer-federal.fixed.md and head-dependent-elsewhere-swap.fixed.md. At that reviewed head, the exact replay check passed: the diff against main was byte-for-byte identical to git diff 35a2cbcbb9 3ebbde6840, preserving all 37 paths in this PR's original patch with no unrelated changes. No YAML syntax repair was needed.

For this review response, merge commit 034486c14c brings in main at 5ec60b209a4647be9daaf4f8a1500eb1bcdf8a94 without conflicts. The later review-fix commit updates tests, comments and the changelog; the previous byte-for-byte replay statement describes the old head, not this revision.

Response to the independent review

1. Replaced test/property placeholders with this revision's results; the hub impact remains explicitly pending, and invariant 4 now describes formula inspection and the under-13 head/spouse exception.
2. Restated invariant 3 for the without-filing-exception helper, separated claimability from actual claims in couples(), drew the filing exception, and recorded a failing ordinary-helper mutation followed by a passing restored run in Tests.
3. Added Illinois personal exemption to Readings for Max with both $0/$2,850 readings and the linked 2022 rebate input choice; code is unchanged.
4. Combined former Colorado readings 1 and 6 into one paired choice, documented both consistent outcomes and evidence, and identified the current inconsistent pair pending Max's ruling; code is unchanged.
5. Left SB3567 unchanged and proposed the pre-2025 baseline-alignment issue in Follow-ups.
6. Corrected 18 test names across 15 YAML files, including the 14 files’ contradictory controls and the rebate’s single/both/neither-filer cases; corrected the single-filer rebate comment. Inputs and expected values are unchanged.
7. Updated the summary for merged Apply the federal rules for a filer who can be claimed as a dependent #10087 and removed the Pause Colorado's family affordability credit in 2026 and leave Idaho's expired child tax credit out of 2026 totals #10051 landing order because its parameter changes are independent.
8. Narrowed the changelog to describe the kept Illinois child credit, disabled-child Colorado care credit, Indiana filer exemptions, and filing exception.
9. Updated the stale Colorado and Illinois EITC comments to match their IRC 32(c)(1)(A) citations.

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