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Gate tip deduction on both legacy and split SSTB inputs #8062

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Merged
MaxGhenis merged 1 commit into from
Apr 17, 2026
Merged

Gate tip deduction on both legacy and split SSTB inputs #8062

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5 changes: 5 additions & 0 deletions changelog.d/fix-tip-deduction-sstb-mixed.fixed.md
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Original file line number Diff line number Diff line change
@@ -0,0 +1,5 @@
Extend `tip_income_deduction_occupation_requirement_met` to recognize
SSTB status from the per-category `sstb_self_employment_income` input,
not only the legacy all-or-nothing `business_is_sstb` flag. This keeps
the §224 SSTB exclusion in force for self-employed tipped workers who
populate the new SSTB inputs added in #7944.
21 changes: 21 additions & 0 deletions ...cy/baseline/gov/irs/income/taxable_income/deductions/tip_income/tip_income_deduction.yaml
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Expand Up @@ -139,3 +139,24 @@
output:
tip_income_deduction_occupation_requirement_met: false
tip_income_deduction: 0

- name: SSTB self-employment income blocks tip deduction even without legacy flag
period: 2025
input:
people:
worker:
ssn_card_type: CITIZEN
is_tax_unit_head: true
is_tax_unit_spouse: false
tip_income: 5_000
treasury_tipped_occupation_code: 102
business_is_sstb: false
sstb_self_employment_income: 50_000
tax_units:
tax_unit:
adjusted_gross_income: 100_000
filing_status: SINGLE
members: [worker]
output:
tip_income_deduction_occupation_requirement_met: false
tip_income_deduction: 0
6 changes: 5 additions & 1 deletion ...e/taxable_income/deductions/tip_income/tip_income_deduction_occupation_requirement_met.py
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Expand Up @@ -20,5 +20,9 @@ def formula(person, period, _parameters):
treasury_tipped_occupation_code = person(
"treasury_tipped_occupation_code", period
)
is_sstb = person("business_is_sstb", period)
is_sstb_legacy = person("business_is_sstb", period)
has_sstb_self_employment_income = (
person("sstb_self_employment_income", period) > 0
)
is_sstb = is_sstb_legacy | has_sstb_self_employment_income
return (treasury_tipped_occupation_code > 0) & ~is_sstb
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