az_families_tax_rebate_subtraction incorrectly applied for TY 2024 #7481
Description
Observation
In a three-way comparison (TaxAct vs TAXSIM vs PolicyEngine) for an AZ joint filer in TY 2024, PE applies a $250 az_families_tax_rebate_subtraction that should not exist for that tax year.
- TaxAct Form 140 page 6, line U ("Arizona Families Tax Rebate") explicitly shows $0
- TAXSIM also does not apply this rebate for TY 2024
- PE applies a $250 subtraction, reducing AZ tax by ~$6 (at the 2.5% rate)
Background
The Arizona Families Tax Rebate (A.R.S. 43-1088) was a one-time rebate based on the 2021 Dependent Tax Credit, issued in 2023. It should not apply to TY 2024 returns. The variable az_families_tax_rebate_subtraction appears to lack a proper sunset or temporal guard, causing it to fire for years beyond its intended scope.
Related: #4580 (original implementation issue for this rebate)
Expected behavior
az_families_tax_rebate_subtraction should return $0 for TY 2024 (and any year other than TY 2021 / the applicable rebate period).
Actual behavior
az_families_tax_rebate_subtraction returns $250 for TY 2024, reducing the computed AZ income tax.
Impact
This causes a ~$6 understatement of AZ state income tax for affected filers:
| Source | AZ state tax | Delta vs TaxAct |
|---|---|---|
| TaxAct | $9,209 | -- |
| TAXSIM | $9,299 | +$90 |
| PE | $9,203 | -$6 |
The $90 TAXSIM discrepancy is a separate issue (dependent tax credit phaseout bug on their side). The $6 PE discrepancy traces entirely to this spurious rebate subtraction.
Context
Discovered during investigation of PolicyEngine/policyengine-taxsim#619 (AZ joint 2024 capital loss handling). The original LTCG subtraction bug from that issue is fixed by #7299.