Base VT Child Care Contribution on net self-employment earnings (Schedule SE Line 6)

[DTrim99]

Fixes #8725. Draft for review.

What

The Vermont Child Care Contribution for self-employed individuals was computed on gross self-employment income, but the Child Care Contribution Worksheet applies the 0.11% rate to net earnings from self-employment (federal Schedule SE, Line 6) — taxable_self_employment_income (92.35% of net SE profit).

- income = add(tax_unit, period, ["total_self_employment_income"])
+ income = add(tax_unit, period, ["taxable_self_employment_income"])

Result (matches the VT worksheet)

For the #1002 filer ($79,684.13 self-employment income, 2025):

	Base	× 0.11%	Result
Before	gross $79,684.13	0.0011	$87.65
After	net $73,588.30 (Sch SE L6)	0.0011	$80.95 (worksheet: $81)

Tests

• Updated the existing unit tests to the net base (e.g. 2025 $10k SE: $11 → $10.16).
• Added a regression test matching the VT worksheet ($79,684 → $80.95).
• Updated the taxsim_record_1_2024 integration test: vt_income_tax $7,963 → $7,958.51 (the $4.49 change is entirely the corrected CCC base — old CCC $60.50 → new $55.87 on $110k SE income; verified no other effect).
• Full VT suite passes (344 tests).

Note (out of scope)

As flagged in #8725, vt_child_care_contributions is added into vt_income_tax but does not flow into the national state_income_tax aggregator. Whether the contribution belongs in state_income_tax is a separate modeling decision, not addressed here.

Context

Reported by Daniel Feenberg (NBER TAXSIM) in PolicyEngine/policyengine-taxsim#1002.

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[codecov]

Codecov Report

✅ All modified and coverable lines are covered by tests.
✅ Project coverage is 86.66%. Comparing base (47cb26b) to head (b270c3f).
⚠️ Report is 22 commits behind head on main.

Additional details and impacted files

@@             Coverage Diff              @@
##              main    #8727       +/-   ##
============================================
- Coverage   100.00%   86.66%   -13.34%     
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  Files            3        1        -2     
  Lines           47       15       -32     
  Branches         0        1        +1     
============================================
- Hits            47       13       -34     
- Misses           0        1        +1     
- Partials         0        1        +1     

Flag	Coverage Δ
unittests	86.66% <100.00%> (-13.34%)	⬇️

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[PavelMakarchuk]

Approve ✅

Verified the fix against the official 2024 Vermont Income Tax Booklet, p.12 — Child Care Contribution Worksheet:

• Line 1: "Enter the amount from federal Form 1040, Schedule SE, Line 6" — the base is net SE earnings, not gross.
• Line 6: × 0.11% (0.0011).

So total_self_employment_income → taxable_self_employment_income is correct: that variable is 0.9235 × gross_sei = Schedule SE Line 6. The worked example reconciles ($73,588.30 × 0.0011 = $80.95 ≈ worksheet $81). Tests cover the 2024 half-base/2025 full-base proration, zero/mixed/negative, SSTB, and a worksheet regression. Full suite green (codecov/project is a non-blocking coverage-delta artifact; the changed file is 100% covered).

Minor (non-blocking): the 2024 rate.income = 0.5 is really the one-time July-1-2024 startup proration (per worksheet Lines 4–5), not an ongoing "50% of SE income" — the numbers are right, a clearer comment would help. And the pre-existing state_income_tax-aggregator note (#8725) can be a separate follow-up.

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