Rhode Island EITC Increase Signed Into Law

Earlier today, Rhode Island Governor Gina Raimondo signed off on a new $8.9-billion budget for the state, which included an increase in the state’s Earned Income Tax Credit (EITC) from 12.5 to 15 percent of the federal credit. 

This is the second year in a row in which the Rhode Island legislature has taken action to expand the state’s EITC, which was reduced from 25 percent of the federal credit to 10 percent in 2014. Gov. Raimondo has been a legislative champion for expanding the credit ever since taking office back in 2015. “Expanding the Earned Income Tax Credit is important to me because it helps hard-working, low-income families in Rhode Island. It rewards work and it helps families who are trying to make ends meet, often working one or two jobs. It puts money in their pockets. It’s the right thing to do, and it’ll stimulate our economy because they’ll go out and spend that money right here in the Rhode Island economy,” Raimondo has said.

According to the Economic Progress Institute, expanding the state’s EITC to 15 percent of the federal credit will help narrow the gap between the percentage of income Rhode Islanders with the lowest wages owe in state and local taxes and the percentage of income owed by low-wage workers in other states. “Rhode Island has one of the highest effective tax rates on low-income workers […],” Douglas Hall of RI Future writes. “The EITC is one of the best ways to provide some targeted tax relief to those who need it most.”