Massachusetts omits the 2020–2021 qualified unemployment deduction (St. 2021, c. 9, § 26(b); Schedule Y line 9c)

Massachusetts allowed a personal income tax deduction of up to $10,200 of unemployment compensation for tax years 2020 and 2021 (household income up to 200% of the federal poverty level). PolicyEngine has no MA unemployment deduction, so eligible 2020–2021 filers are over-taxed by up to 5% × $10,200 = $510 per eligible person (more where the deduction also triggers No Tax Status or the Limited Income Credit).

Originating report: PolicyEngine/policyengine-taxsim#1106 (TY2021 single filer, $10,007 wages + $13,260 UI; TaxAct claims the $10,200 deduction on Schedule Y line 9c, PolicyEngine claims $0).

## Evidence

Session law — St. 2021, c. 9, § 26(b) ("An Act financing a program for improvements to the Unemployment Insurance Trust Fund and providing relief to employers and workers in the Commonwealth", signed April 1, 2021; [malegislature.gov](https://malegislature.gov/Laws/SessionLaws/Acts/2021/Chapter9)):

> Notwithstanding any general or special law to the contrary, for taxable years beginning on January 1, 2020 and January 1, 2021, any amount, up to $10,200, of unemployment compensation that is included in a taxpayer's federal gross income, as defined in section 1 of chapter 62 of the General Laws, shall be deducted from said federal gross income for the purpose of determining Massachusetts gross income under section 2 of chapter 62 of the General Laws if the taxpayer's household income is not more than 200 per cent of the federal poverty level as calculated by the United States Department of Health and Human Services. For the purpose of this subsection, "household income" shall be determined without regard to this section.

2021 Form 1 instructions, Schedule Y, "Line 9. Other Qualified Deductions" (extracted with pdftotext from the [2021 Form 1 instructions](https://taxsim.nber.org/historical_state_tax_forms/MA/2021/dor-2021-inc-form-1-inst.pdf)):

> ◗ 9c Qualified Unemployment Deduction. If you received unemployment income and your household income was not more than 200% of the federal poverty level, you may be able to deduct up to $10,200 of unemployment benefits from your taxable income for each eligible person. Complete the worksheet to find out if you are eligible for a deduction and if so, the amount.

The worksheet on the same page defines household income and the threshold (household size 1 → $25,520):

> 5. Enter Federal Adjusted Gross Income from U.S. Form 1040, line 11 … 6. Enter any amount of tax-exempt interest you received from U.S. 1040 line 2a … 7. Enter untaxed portion of social security benefits received from U.S. 1040, lines 6a and 6b … 9. Total Household Income. Combine lines 5 - 8. If the amount on Line 9 is greater than the amount on line 4, STOP. You do not qualify for the Deduction. … 13. Enter the smaller of line 12 or $10,200. … 14. Add lines 11 and 13. Enter the result here and on Schedule Y line 9c.
>
> Income at 200% of the Federal Poverty Level — Family size 1: $25,520; 2: $34,480; 3: $43,440; 4: $52,400 …

TaxAct return bundled with the taxsim issue (2021 Schedule Y, extracted with pdftotext):

> 9c. Qualified unemployment deduction … 10200
> 19. Total other deductions. Add lines 1 through 18 … 10200

## Current PolicyEngine behavior

`ma_part_b_taxable_income_deductions` ([source](https://github.com/PolicyEngine/policyengine-us/blob/master/policyengine_us/variables/gov/states/ma/tax/income/taxable_income/ma_part_b_taxable_income_deductions.py)) returns exactly

```python
fica + bank_interest_deduction + rent_deduction + charitable_deduction + plan_529_deduction
```

and a search for "unemployment" across `variables/gov/states/ma/` and `parameters/gov/states/ma/tax/` matches only payroll-tax and benefit-program files — there is no unemployment deduction variable or parameter in the MA income tax tree.

On the taxsim #1106 record (single, age 62, $10,007.08 wages, $13,260 UI, $31,830 rent), policyengine-us 1.776.2 gives MA 5.0% income after deductions of $19,501.54 (FICA $765.54 + rent cap $3,000 only) and tax before credits $755.08. Household income per the worksheet is $23,267.08 < $25,520, so the return qualifies for the full $10,200 deduction, as TaxAct's Schedule Y shows.

## Suggested fix

- Add a `ma_qualified_unemployment_deduction` (person-level `min(unemployment_compensation, $10,200)`, summed to the tax unit), effective 2020-01-01 through 2021-12-31 only, gated on household income (federal AGI + tax-exempt interest + untaxed social security) ≤ 200% of the federal poverty level for the household size (1 + 1 if joint + dependents per the worksheet).
- Include it in `ma_part_b_taxable_income_deductions` (Schedule Y line 9c flows into Form 1 line 15) so that MA AGI, No Tax Status, and the Limited Income Credit respond.
- Parameterize the $10,200 cap and the 200% multiplier; add explicit zero/inapplicable scoping outside 2020–2021 so the temporary provision does not leak into other years.

## Integration test

Expected value from the TaxAct 2021 Schedule Y line 9c ($10,200) and the official worksheet (min($13,260, $10,200) with household income $23,267 < $25,520):

```yaml
- name: MA 2021 qualified unemployment deduction (taxsim #1106, TaxAct Schedule Y line 9c = 10,200)
period: 2021
input:
people:
person:
age: 62
employment_income: 10_007
unemployment_compensation: 13_260
rent: 31_830
tax_units:
tax_unit:
members: [person]
households:
household:
members: [person]
state_code: MA
output:
ma_qualified_unemployment_deduction: 10_200
```

(The resulting Form 1 flow — line 17 ≈ $9,301.54, tax capped by the Limited Income Credit at 10% × (MA AGI − $8,000) ≈ $130 — is arithmetic derived from the instructions, not from the bundled TaxAct return, whose Form 1 omits the wage income; see the question posted on the taxsim issue.)

Start with policyengine_us/variables/gov/states/ma/tax/income/taxable_income/ma_part_b_taxable_income_deductions.py and inspect the existing Massachusetts deduction variables and parameters under parameters/gov/states/ma/tax/. Add the named integration case for 2021 and verify the deduction is $10,200 when eligible, while returning zero outside 2020–2021 and for households over the threshold.

Written by the indexing model from the issue text.