[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)	No child on such a return	The credit is a share of the federal credit claimed by the resident individual (HB23-1112, p.4).
co_ctc_eligible_child (2024+)	A claimable filer keeps the credit for an otherwise eligible IRC 152(c) qualifying child	C.R.S. 39-22-129(2)(a)(II), (4.5) defines the child through IRC 152(c), without requiring allowable dependent status (HB23-1112, p.4); see reading 1.
co_family_affordability_credit	A claimable filer keeps the credit for an otherwise eligible IRC 152(c) qualifying child	C.R.S. 39-22-130(2)(a), (3) incorporates the statutory child definition (HB24-1311, p.3); see reading 1.
co_low_income_cdcc	Counts only children under 13 who satisfy independent state dependency and federal child care qualifying-person conditions; a claimable filer has none, including incapable children, absent the filing exception	C.R.S. 39-22-119.5(2)(b), (3)(a)(III)-(IV) separately requires IRC 152(a)(1) dependency and hypothetical IRC 21 eligibility. The federal disability exception does not waive the independent state requirement; see 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_personal_exemption_eligibility_status, il_personal_exemption	A claimable but unclaimed filer retains the basic amount; an actually claimed filer loses it only when Illinois base income exceeds that amount, subject to the separate exemption income limit	35 ILCS 5/204(b), (g) (P.A. 103-9, p.357-360); see reading 3.
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:

• For ordinary children subject to the dependent-taxpayer bar, Colorado's regular child care credit is already zero through its federal-credit input (co_cdcc); the federal incapacity exception remains available. Connecticut's and Indiana's EITCs match federal eitc, gated in Make rules for a filer claimed elsewhere independent of which spouse is labelled head #10024. The federal student loan interest deduction that all four states start from also already applies its bar. YAML regression cases cover the Colorado credit and Connecticut and Indiana EITCs.
• 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.

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

These readings apply Max's statute-first ruling of 2026-10-19: the statute controls when forms or instructions conflict; forms fill gaps where the statute is silent. The three Colorado and Illinois items in the statute-backlog spec are resolved below. The remaining readings keep their existing behavior. No in-scope item is tied to d1741, d1742 or d1744, and this PR leaves the provisions protected by those decisions unchanged.

1. Colorado paired reading.

   us-co:claimable-filer-child-and-family-credits

   Changed: Removed the draft's filer-claimability exclusions from co_ctc_eligible_child for 2024+ and co_family_affordability_credit, restoring main's statutory treatment. A claimable filer with $10,000 AGI and an eligible age-four child retains $1,200 CTC and $3,273 family credit in 2025 ($1,200 and $3,200 respectively in 2024).

   Kept: The 2022-2023 Colorado CTC dependent-taxpayer gate and the existing child-credit amounts and income thresholds.

   Why: C.R.S. 39-22-129(2)(a)(II), (4.5) and 39-22-130(2)(a), (3) incorporate IRC 152(c) qualifying-child status (HB23-1112, p.4, HB24-1311, p.3); IRC 152(b)(1) removes dependent status without erasing qualifying-child status. The 2025 booklet, p.7's federal-child-credit exclusion therefore does not control these statutory child definitions. The 2022-2023 CTC remains tied to the federal credit actually claimed.

   us-co:claimable-filer-disabled-child-care-credit

   Changed: Added an independent state dependency condition to co_low_income_cdcc, alongside age under 13 and is_cdcc_eligible; the tax-unit filer exclusion is broadcast to members. A claimable filer with an incapable age-ten child and $1,000 care expenses receives $0; the otherwise identical nonclaimable filer keeps $250.

   Kept: The federal disability exception in is_cdcc_eligible and the low-income credit's expense allocation, earned-income limit, rates and caps. The filing exception continues to restore allowable dependency.

   Why: C.R.S. 39-22-119.5(2)(b), (3)(a)(III)-(IV) independently requires an IRC 152(a)(1) dependent under 13 and hypothetical IRC 21 eligibility. Those cumulative conditions mean IRC 21's disability relaxation cannot waive Colorado's separate dependency requirement. The 2025 DR 0347 instructions, p.1 define qualifying expenses through Section 21 without expressly waiving the state's independent dependency condition.

2. Illinois child tax credit. Changed: No eligibility change; the PR keeps its corrected section 244 references and comment. Kept: A claimable filer can receive the credit for their own IRC 152 qualifying child: $27.20 in the 2025 witness household ($13.60 in the 2024 probe). Why: 35 ILCS 5/244(d) defines a qualifying child through IRC 152 rather than requiring allowable dependent status. The 2024-2025 instructions, p.1's dependent-child wording does not override that definition. The 2026 draft instructions, p.2 also use qualifying-child wording. This matches the statutory reading used for Colorado's 2024+ child and family credits. Section 244 has not changed substantively since P.A. 103-592; P.A. 104-417 corrected a typo.

3. Illinois personal exemption: actual claim versus claimability. Changed: il_personal_exemption_eligibility_status counts zero, one or two actual dependent claims among the tax-unit head/spouse members using claimed_as_dependent_on_another_return. This count distinguishes both spouses being claimed, which the previous Boolean addition collapsed to one. A claimable but unclaimed single filer with $10,000 Illinois base income keeps $2,850 in 2025 and $2,375 in 2021; an actually claimed 2025 filer above the basic amount gets $0. The single-filer branch now also includes equality at the basic-amount boundary: an actually claimed filer with exactly $2,850 Illinois base income receives one $2,850 basic amount, correcting the previous fallthrough to the two-amount status and $5,700. Kept: The prerequisite that Illinois base income exceed the basic amount, the separate exemption income-limit gate, all annual amounts, and the shared claimability helpers used by other rules. Why: 35 ILCS 5/204(b) requires an actual claim as well as base income above the basic amount (P.A. 103-9, p.357). The operative clause is unchanged across 2021-2025. IL-1040 Line C instead asks about claimability (2021, p.6, 2025, p.6); the statute controls. This also aligns the input distinction with the existing Illinois rebate rule below.

4. Illinois 2022 rebate, one claimed spouse. Changed: No change in this revision. Kept: The exclusion reads actual claims; a claimable but unclaimed filer retains eligibility. A joint return with only one spouse actually claimed retains the existing $100 joint amount and no dependent amount. Why: P.A. 102-0700 sec. 212.1(a), p.131-132 excludes a taxpayer actually claimed on another individual's return. The current implementation applies that exclusion per taxpayer and retains the joint amount while one spouse remains eligible. The claimability wording on the 2021 return does not displace the statutory actual-claim condition. Under IRC 152(b)(2), a joint filer ordinarily can be claimed only for a refund-only return, so the one-claimed-spouse case is narrow.

5. Childless EITC on a joint return: Colorado and Illinois. Changed: No change to the draft's filer-dependency gates. Kept: Either spouse being claimable without the filing exception bars the childless EITC, consistently with the federal rule in Make rules for a filer claimed elsewhere independent of which spouse is labelled head #10024. Why: The states' expanded eligibility routes do not waive the federal dependent-taxpayer bar, and Publication 596, p.18 requires that neither spouse be claimable when claiming the EIC jointly. Illinois' expanded worksheet omits its dependency question for joint filers; that omission does not establish a statutory waiver. The filing exception remains available through head_or_spouse_is_dependent_elsewhere_without_filing_exception.

6. Connecticut's 2022 child rebate. Changed: No change to the draft's dependency input. Kept: The child must be properly claimable on the taxpayer's 2021 federal return; filer claimability prevents that dependent claim unless the filing exception applies. Why: Section 411(b)(1)'s valid-claim condition and TSSB 2022-5, p.1's proper-claim condition concern the child on that return. IRC 152(b)(1) and Publication 501, p.11 make allowable dependent status turn on filer claimability with the filing exception.

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 low-income child care credit, or Indiana additional exemption, and Indiana base exemptions are $1,000 per filer. The refund-only filing exception can restore dependent-based benefits. Colorado's 2024+ CTC and family credit instead retain eligible qualifying children; Illinois' own basic exemption depends on actual claims and its income conditions.
4. Formula comparison when nobody is claimable. Inspection shows the added claimability gates are inactive when no filer can be claimed. Colorado's low-income child care credit additionally requires a qualifying child dependent and federal child care qualifying-person status, so an under-13 head or spouse no longer enters the old raw-age count. Illinois' personal-exemption change affects claimable but unclaimed filers above the basic amount, correctly distinguishes two actual claims, and corrects the single-filer equality boundary. Aggregate impact awaits the hub run.

Tests

• Current revision — 82 YAML cases across 4 files passed; 5 Python tests across 1 file passed. The required inventory contains 409 unique files (408 YAML across baseline/contributed Colorado, Connecticut, Illinois and Indiana, plus the changed property file), including all 21 PR-changed test files; 404 required files remain incomplete. Each attempted file ran in its own foreground process, with OMP, OpenBLAS, MKL, VecLib and NumExpr capped at four threads and OMP_WAIT_POLICY=PASSIVE. Severe host contention made the first completed YAML files take about 33–34 minutes each. Validation was stopped before the six-hour job limit; every test process was reaped. No microsimulation files were identified or excluded. Only completed per-file passes are counted. Added regression cases cover the Colorado claimable/nonclaimable incapable-child witnesses, 2024-2025 Colorado CTC and family-credit statutory amounts, and Illinois actual-claim versus claimability cases for 2021 and 2025. Illinois cases also cover zero/one/two head/spouse claims, the claimed-child member mask, single-filer base incomes of $2,849/$2,850/$2,851, and the separate AGI gate. The existing swap and filing-exception controls remain.

Completed file	Cases/tests	Seconds
co_low_income_cdcc.yaml	19	2005.67
co_ctc.yaml	40	2051.30
il_personal_exemption.yaml	13	611.72
test_claimable_filer_co_ct_il_in_invariants.py	5	704.16
co_family_affordability_credit.yaml	10	931.93

Incomplete attempts at the end of validation:

policyengine_us/tests/policy/baseline/gov/states/il/tax/income/exemptions/il_personal_exemption_eligibility_status.yaml: stopped at the test deadline; no completed pass counted.

• Property tests — passed 5 tests: policyengine_us/tests/core/test_claimable_filer_co_ct_il_in_invariants.py. These reuse the federal check_swap/check_monotone helpers across Colorado, Connecticut, Illinois and Indiana for 2021, 2023, 2025 and 2026. Claimability, actual claims and the filing exception are drawn separately; deterministic cases guarantee coverage of their distinctions. il_personal_exemption now joins the outputs checked for head/spouse swap invariance and monotonicity when another filer is actually claimed. The Colorado CTC zero identity remains only before 2024. The person-level family credit is covered through co_refundable_credits for swaps, and nonpublic-school attendance is covered by YAML.
• Style checks — passed. make format (Ruff formatting and lint) passed before each of the six new commits. git diff --check gh/main...HEAD passed; the checkout is clean.
• Historical evidence from the preceding review, before this statute-first revision: 271 YAML cases passed across 18 files, each in its own foreground process with thread caps; the complete property file passed 5 tests; Ruff 0.15.5 formatting and lint checks passed. A targeted mutation replacing the without-filing-exception helper with the ordinary claimability helper in il_dependent_exemption failed the 2025 filing-exception restoration identity ($0 instead of $2,850); restoring the production helper returned the property file to 5 passing tests. Those results describe the prior head and are not validation of this revision.

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

Merge commit feca5b20949dacc49a4aac78099355ae7100da82 incorporates upstream/main 461f78e1eed35f90019eb46d8ac8dc7cdcc78b61 without conflicts, preserving both parents and the existing PR history. Three statute-first implementation commits and two fixture-only corrections follow that merge; current head is 196c7c7206c2812842fed3472163abae8572266f. The Illinois boundary and AGI controls use independent single-filer cases. The fixture corrections change no production formula.

Historical integration: merge 29a702c5f546338a6c350ec335aafee9d479d70a incorporated 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 took main's reviewed versions because this PR had left them unchanged from its federal base. The obsolete federal changelog fragments were removed. The replay check at that earlier head preserved the original 37-path patch byte for byte. Subsequent merge 034486c14c incorporated main at 5ec60b209a4647be9daaf4f8a1500eb1bcdf8a94 without conflicts. These statements record earlier integration checks, not the current revision's result.