Raises the earned-income tax credit to thirty percent (30%) for the tax years 2027 and beyond.

Rhode Island Earned Income Tax Credit Increase

This bill would increase Rhode Island's Earned Income Tax Credit (EITC) from its current rate to 30% starting in the 2027 tax year and continuing into the future. The Earned Income Tax Credit is a tax benefit designed to help working people with low to moderate incomes — it reduces the amount of taxes they owe, and in some cases can result in a refund even if they owe little or no taxes.

The people most directly affected by this change would be working Rhode Islanders who earn lower to moderate wages, particularly those supporting families. The federal government has its own EITC program, and Rhode Island's credit is calculated as a percentage of that federal credit. By raising the state's percentage to 30%, qualifying workers would receive a larger state-level tax benefit on top of what they already receive from the federal program. This means more money back in the pockets of eligible working residents each tax year.

Currently, the bill has been introduced and sent to the Senate Finance Committee, where lawmakers will review it before deciding whether to move it forward. If passed, the change would not take effect until the 2027 tax year, meaning residents would first see the impact when filing their 2027 taxes. The bill would also have an ongoing cost to the state in the form of reduced tax revenue, though the exact amount has not been specified in the bill summary.