Includes individuals as contributors. Increases annual credit cap by percentage amount of unused credits. Increases the tax credit rate percentage. Establishes scholarships of $750,000 to disadvantaged students and $250,000 to pre-K students.

Rhode Island Scholarship Tax Credit Bill

This bill makes several changes to Rhode Island's existing tax credit program for donations to scholarship organizations. Currently, only businesses can donate to these organizations and receive a tax credit in return. This bill would expand that program to also allow individual taxpayers to make donations and receive tax credits on their state taxes. It also increases the percentage of the tax credit that donors receive, meaning contributors would get a larger reduction in their tax bill for each dollar they donate to qualifying scholarship organizations.

The bill also adjusts how the annual cap on total tax credits works. Under the new rules, if the full amount of available tax credits goes unused in a given year, that unused portion can carry forward and increase the cap for the following year. This is designed to ensure the program grows over time and encourages more donations. Additionally, the bill sets aside specific scholarship funding amounts: $750,000 for disadvantaged students and $250,000 for pre-kindergarten students, directing more resources toward lower-income families and early childhood education.

This bill primarily affects Rhode Island taxpayers (both individuals and businesses) who may want to donate to scholarship organizations, as well as students and families who could benefit from scholarship awards — particularly those from lower-income households and children in pre-K programs. The bill has been referred to the Senate Finance Committee, where it will be reviewed before any further legislative action.