Bill > S0040

This bill increases the Rhode Island earned-income credit (EIC), a tax benefit for low to moderate-income workers, to seventeen percent (17%) of the federal earned-income credit as of January 1, 2026, and then to eighteen percent (18%) as of January 1, 2027. The credit is designed to provide tax relief by reducing the amount of state income tax owed, and if the credit exceeds the taxpayer's state income tax liability, the excess can be refunded to the taxpayer. This increase continues a trend of gradual expansions to the state's earned-income credit, which has been incrementally raised from 25% to 16% of the federal credit over the past several years. The bill aims to provide additional financial support to working families by reducing their tax burden and potentially providing a refundable credit that can help offset living expenses. The change will automatically take effect upon the bill's passage, with the percentage increases implemented on the specified dates in 2026 and 2027.

Budget and Finance

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