Fix New Jersey property tax credit income eligibility logic

[martinholmer]

A number of bugs introduced in PR #4461 have caused a massive regression in NJ income tax testing results. Income eligibility for the NJ property tax credit is based on NJ gross income (not federal AGI as misspecified in PR #4461). Here are examples of the recently introduced bugs in the NJ income tax code:

policyengine-us/policyengine_us/variables/gov/states/nj/tax/income/credits/property_tax_credit/nj_property_tax_credit_eligible.py

Lines 40 to 42 in e3edf3f

	federal_agi = tax_unit("adjusted_gross_income", period)
	filing_status = tax_unit("filing_status", period)
	agi_eligible = federal_agi <= p.income_limit[filing_status]

policyengine-us/policyengine_us/parameters/gov/states/nj/tax/income/credits/property_tax/income_limit.yaml

Line 1 in e3edf3f

description: New Jersey limits the property tax credit to filers with federal adjusted gross income below this limit, based on filing status.

[MaxGhenis]

Thanks Martin. @hua7450 in the future could you please file a separate issue before adjusting an existing program? #4461 went beyond the scope indicated by the issue title and PR description (adding 2023 rules) by amending the property tax credit in 2021. Let's also add a legal code reference for the income limit when fixing this.

@martinholmer, could you share why the lack of the NJ property tax credit income limit prior to #4461 didn't result in validation failures for 2021? Was it not in taxsim, or is it too niche a case to show up? If the latter could you add filers to the validation set that would be affected?

[hua7450]

I apologize, I will use more accurate descriptions for PRs in the future.

[martinholmer]

@MaxGhenis asked in issue #4475:

@martinholmer, could you share why the lack of the NJ property tax credit income limit prior to #4461 didn't result in validation failures for 2021?

I don't know. Are you really sure there was no income limit in the older code?

Was it not in taxsim?

It has always been in TAXSIM35, which is why we used to not get property tax credit diffs.

or is it too niche a case to show up?

The samples being used today are exactly the same as the samples we've been using over the past year or more. So, the cases in which this difference showed up after PR #4461 have always been in the samples.

If the latter could you add filers to the validation set that would be affected?

This is not necessary because we have test failures in the standard samples (for example, property tax diffs in 134 cases in the q21 sample of 100,000 cases).

[MaxGhenis]

Are you really sure there was no income limit in the older code?

I think this requires more digging, and a legal code reference. nj_property_tax_credit_eligible is based in part on nj_property_tax_deduction_eligible, which has an income limit. But the credit has other eligibility options that did not consider income prior to #4461; see these lines:

Here you can see the file at its previous snapshot.

At first glance it's not obvious how these interact. Maybe @leogoldman remembers?

[leogoldman]

I think you have it right, Max. The income limit applies in all cases to the NJ Property Tax Deduction (appropriate nj_agi check in nj_property_tax_deduction_eligible). Property tax paying filers that are seniors, blind, or disabled that do NOT meet the income limit are still eligible for the NJ Property Tax Credit, which is why we had nj_property_tax_credit_eligible set to either nj_property_tax_deduction_eligible OR (Pays property taxes AND blind/disabled), with no check on income for the latter group.

#4461 introduces an AGI check for these filers.

From page 25 (pdf page 27) of the 2023 NJ-1040 instructions:

Seniors or Blind/Disabled Persons Not Required to File
Form NJ-1040
If you (or your spouse if filing jointly) were 65 or older or blind
or disabled on the last day of the tax year, and your income on
line 29 is $20,000 or less ($10,000 if filing status is single or
married/CU partner, filing separate return), and you met the eligibility requirements, you qualify for a Property Tax Credit.
If you are eligible for a Property Tax Credit, you can
claim your credit on Form NJ-1040 or you can file Form
NJ-1040-HW only (see page 49). Do not file both Form
NJ-1040 and Form NJ-1040-HW.