Earned Income Tax Credit^

Income Tax Rate: 3.75-5.99 percent

State EITC: Yes

Refundable: Yes

Enacted: 1986

Formula: 12.5 percent of the federal credit, raised 2015

Notes/News: Rhode Island used to have an EITC equal to 25 percent of the federal credit; however only a portion of the credit was refundable. During the 2006 legislative session, the Rhode Island Legislature successfully expanded the state’s refundable portion of the EITC from 10 percent to 15 percent of the state credit. In February 2011, Senate Bill 0191 was introduced to make the credit completely refundable. One Rhode Island, a coalition of more than 160 human services organizations, included the further expansion of an Earned Income Tax Credit in their annual legislative platform. In tax year 2008, 75,682 Rhode Island filers claimed the EITC. The total value of all claims was $9.4 million. Before Rhode Island had processed all claims for tax year 2009, it had already approved over 71,000 credits.¹

Under the 2014 budget bill, the Rhode Island EITC was reduced from 25 to 10 percent of the federal credit and became fully refundable in tax year 2015. This increased its availability to the poorest families, but harmed those who make slightly more.

In her budget for fiscal year 2016, Rhode Island Governor Gina Raimondo (D) proposed increasing the state EITC from 10 percent to 15 percent of the federal credit. Instead, the state legislature voted unanimously to raise the EITC from 10 to 12.5 percent of the federal credit as part of the state budget. Gov. Raimondo signed the budget into law in June 2015. 

Reports/Materials: The 2014 Rhode Island Standard of Need, Economic Progress Institute, January 2015

Senate to vote on budget that cuts $8 million in property tax assistance for more than 28,000 homeowners and renters, gives large tax breaks to handful of wealthy heirs, The Economic Progress Institute, June 2014

Few Winners and Many Losers in Rhode Island Tax Reform, The Economic Progress Institute, June 2014

Enhancing the Economic Security of Low-Income Working Rhode Islanders by Increasing the State’s Earned Income Tax Credit Refund, The Economic Progress Institute, April 2013

“Rhode Island State & Local Taxes,” from Who Pays? A Distributional Analysis of the Tax Systems in All 50 States, Institute on Taxation and Economic Policy, January 2013

The 2012 Rhode Island Standard of Need, The Economic Progress Institute, November 2012

Rhode Island: State and Local Taxes in 2007, Institute on Taxation and Economic Policy, November 2009

Child Tax Credit^

State Credit: No

Child Dependent Care Tax Credit^

State Credit: Yes

Refundable: No

Formula: 25 percent of the federal CDCTC

Property Tax Circuit Breaker^

Circuit Breaker: Yes

Refundable: Yes

Eligibility: All homeowners and renters with household income below $30,000. Beginning in tax year 2014, only the elderly and disabled will be able to claim this credit.

Formula: The circuit breaker is triggered if property taxes exceed between 3 and 6 percent of household income but may not exceed $300. Property taxes for renters are calculated as 20 percent of annual rent. Circuit breaker triggers for renters and homeowners are calculated using the following table:

Notes/News: In tax year 2007, filers claimed $14 million worth of circuit breaker credits. The state Division of Taxation reports that filers claimed $15,716,239 in TY 2009.² Under the 2014 budget bill, the property tax circuit breaker will only be available to seniors and the disabled beginning in tax year 2014.

Reports/Materials: Senate to vote on budget that cuts $8 million in property tax assistance for more than 28,000 homeowners and renters, gives large tax breaks to handful of wealthy heirs, The Economic Progress Institute, June 2014

Few Winners and Many Losers in Rhode Island Tax Reform, The Economic Progress Institute, June 2014