Add SC OBBBA non-conformity addition for 2025

[PavelMakarchuk]

Summary

SC starts from federal taxable income but does not conform to the One Big Beautiful Bill Act (OBBBA) provisions that reduce it. This PR adds the OBBBA non-conformity addition to SC1040 line 2e.

Closes #7854

What SC adds back

OBBBA Provision	Add-back Amount	Variable
Standard deduction increase	$1,500 (MFJ), $750 (Single)	Computed from pre-OBBBA vs federal std ded
Senior deduction (age 65+)	$6,000 per eligible person	additional_senior_deduction
Tip income deduction	Varies	tip_income_deduction
Overtime income deduction	Varies	overtime_income_deduction
Auto loan interest deduction	Varies	auto_loan_interest_deduction

Test case (from TaxAct)

MFJ, primary age 65, $100K pension, $10K gross SS, 2 dependents:

Item	Before	After	TaxAct
SC OBBBA addback	$0	$7,500	$7,500
SC taxable income	$31,110	$38,610	$38,610
SC income tax	~$1,166	~$1,675	$1,677

Note

This pattern will likely need to be replicated for other states that start from federal taxable income but don't conform to OBBBA.

Test plan

All 88 SC tax tests pass.

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[codecov]

Codecov Report

✅ All modified and coverable lines are covered by tests.
✅ Project coverage is 100.00%. Comparing base (623a65c) to head (6c8ba6b).
⚠️ Report is 136 commits behind head on main.

Additional details and impacted files

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  Files           12         2    -10     
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- Hits           173        44   -129     

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[hua7450]

Follow-up: SALT $40K cap not modeled (pre-existing bug)

Surfaced during review of this PR — flagging here because it's the largest unresolved item in SC Information Letter #26-4 Revised (Item 6), and shares scope with the OBBBA non-conformity work in this PR. Out of scope for this PR; recommended as a separate follow-up.

Issue. SC has not conformed to OBBBA's increase in the federal SALT cap from $10,000 to $40,000 (Letter Item 6). For SC itemizers, the SALT addback should still use the pre-OBBBA $10,000 / $5,000 (MFS) cap.

Where it manifests. policyengine_us/variables/gov/states/sc/tax/income/additions/sc_state_tax_addback.py reads the federal SALT cap directly:

cap = parameters(period).gov.irs.deductions.itemized.salt_and_real_estate.cap[filing_status]

That parameter steps up to $40,000 at 2025-01-01, so SC inherits the post-OBBBA cap and systematically understates the SC SALT addback (and therefore SC tax liability) for any SC itemizer with SALT > $10,000 — exactly the population the federal change targets.

Recommended follow-up (separate PR).

1. Add policyengine_us/parameters/gov/states/sc/tax/income/additions/obbba/pre_obbba_salt_cap.yaml with $10,000 / $5,000 (MFS), referenced to SC Information Letter #26-4.
2. Update sc_state_tax_addback.py to read this SC-frozen parameter instead of gov.irs.deductions.itemized.salt_and_real_estate.cap.
3. Add tests covering MFJ / Single / MFS itemizers with SALT just below and well above $10,000.

Out of scope but noted. The remaining two SC Letter items (R&E §174A, §179 $2.5M expensing) are appropriately not modeled — PolicyEngine doesn't track per-taxpayer R&E expenditures or §179 elections.

[PavelMakarchuk]

Filed the SALT cap follow-up as #8240 — adds a SC-frozen $10K / $5K MFS state_tax_addback/salt_cap parameter and updates sc_state_tax_addback.py to read from it. Note: walking through the worksheet math, the current code actually overstates the SC SALT addback (a higher federal cap leaves more room for state-income-tax addback in line 5), not understates as described in the review — but either way the fix is the same per SC IL #26-4 Item 6. 10/10 SC SALT addback tests pass; 309/309 SC tax tests pass.

Could you dismiss the CHANGES_REQUESTED review on this PR (or mark it as out-of-scope) so it can move to merge once #8240 lands?

[PavelMakarchuk]

Addressed the SALT cap non-conformity in commit `b0884b3` on this PR (rather than a separate one):

• Added `policyengine_us/parameters/gov/states/sc/tax/income/additions/obbba/pre_obbba_salt_cap.yaml` ($10K / $5K MFS), alongside the existing `pre_obbba_standard_deduction.yaml`. References SC IL make a test for max snap benefit, add to existing tests #26-4 Item 6, SC1040 worksheet instructions, and TCJA § 11042.
• Updated `sc_state_tax_addback.py` line 5 to read the SC-frozen cap instead of `gov.irs.deductions.itemized.salt_and_real_estate.cap`.
• Added 4 new 2025 tests: MFJ just above $10K, MFJ high-SALT (full cap consumed by real estate, addback drops to $0), SINGLE, MFS. Existing 6 pre-OBBBA cases unchanged.
• Updated changelog fragment to mention the SALT cap addition.

Direction-of-bias note: tracing the worksheet math, a higher federal cap leaves more "room" for state-income-tax addback in line 5 (`cap − real_estate_taxes`), so the previous code actually overstated the SC SALT addback (and SC tax liability) for itemizers with SALT > $10K, not understated. The fix is the same either way.

Verification: 10/10 `sc_state_tax_addback.yaml` tests pass; 310/310 SC tax tests pass; `make format` clean.

Could you re-review when you have a chance?

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