Add a tax-only Roth conversion input

changelog.d/added/7946.md

@@ -0,0 +1 @@
+Add a taxable Roth conversions input for tax-only retirement conversion modeling.

policyengine_us/parameters/gov/irs/gross_income/sources.yaml

@@ -22,6 +22,7 @@ values:
     - taxable_social_security
     - illicit_income
     - taxable_retirement_distributions
+    - taxable_roth_conversions
     - miscellaneous_income
     # Listed separately on 1040 line 8g.
     - ak_permanent_fund_dividend

policyengine_us/tests/policy/baseline/gov/irs/irs_gross_income.yaml

@@ -8,6 +8,13 @@
   output:
     irs_gross_income: 1 + 2 + 3 + 4
 
+- name: IRS gross income includes taxable Roth conversions.
+  period: 2022
+  input:
+    taxable_roth_conversions: 5
+  output:
+    irs_gross_income: 5
+
 - name: IRS gross income includes farm operations income.
   period: 2022
   input:

policyengine_us/tests/policy/baseline/gov/ssa/ssi/income/ssi_unearned_income.yaml

@@ -12,3 +12,17 @@
     gi_cash_assistance: 4
   output:
     ssi_unearned_income: 1 + 2 + 3 + 4
+
+- name: SSI unearned income ignores taxable Roth conversions.
+  period: 2022
+  input:
+    taxable_roth_conversions: 1_000
+  output:
+    ssi_unearned_income: 0
+
+- name: SSI unearned income still counts retirement distributions.
+  period: 2022
+  input:
+    retirement_distributions: 1_000
+  output:
+    ssi_unearned_income: 1_000

policyengine_us/tests/policy/baseline/gov/usda/snap/income/snap_unearned_income.yaml

@@ -0,0 +1,18 @@
+- name: SNAP unearned income defaults to zero.
+  period: 2022
+  output:
+    snap_unearned_income: 0
+
+- name: SNAP unearned income ignores taxable Roth conversions.
+  period: 2022
+  input:
+    taxable_roth_conversions: 1_000
+  output:
+    snap_unearned_income: 0
+
+- name: SNAP unearned income still counts retirement distributions.
+  period: 2022
+  input:
+    retirement_distributions: 1_000
+  output:
+    snap_unearned_income: 1_000

policyengine_us/tests/policy/baseline/household/income/person/retirement/taxable_roth_conversions.yaml

@@ -0,0 +1,11 @@
+- name: Taxable Roth conversions default to zero.
+  period: 2022
+  output:
+    taxable_roth_conversions: 0
+
+- name: Taxable Roth conversions can be provided directly.
+  period: 2022
+  input:
+    taxable_roth_conversions: 1_000
+  output:
+    taxable_roth_conversions: 1_000

policyengine_us/tools/default_uprating.py

@@ -12,6 +12,7 @@
     "ssi_reported",
     "tax_exempt_403b_distributions",
     "taxable_ira_distributions",
+    "taxable_roth_conversions",
     "w2_wages_from_qualified_business",
     "roth_ira_contributions",
     "social_security_retirement",

policyengine_us/variables/household/income/person/retirement/taxable_roth_conversions.py

@@ -0,0 +1,14 @@
+from policyengine_us.model_api import *
+
+
+class taxable_roth_conversions(Variable):
+    value_type = float
+    entity = Person
+    label = "Taxable Roth conversions"
+    unit = USD
+    definition_period = YEAR
+    documentation = (
+        "Taxable amounts converted from tax-deferred retirement accounts into "
+        "Roth accounts. These amounts count in tax gross income but do not "
+        "represent cash retirement distributions available for spending."
+    )