Senate OKs Conley legislation to increase Rhode Island’s earned income tax credit
STATE HOUSE — The Senate today passed legislation introduced by Sen. William J. Conley Jr. (D-Dist. 18, East Providence, Pawtucket) that would increase Rhode Island’s earned income tax credit.
The legislation (2019-S 0272) would raise the earned income tax credit from 15 percent to 20 percent for the tax years 2020 and beyond.
The EITC is a tax credit that reduces the income tax owed by lower-wage working families. The federal credit is considered one of the nation’s most effective tools for lifting families out of poverty, boosting the incomes of low-paid working families who struggle to afford basic needs like housing, heat, food, and health care.
The value of the federal credit changed in December 2017 with passage of the Federal Tax Cuts and Jobs Act, which uses a different measure of inflation, the Consumer Price Index. This means that the maximum value of the federal credit will rise more slowly over time than under the previous method.
“This change reduces the value of Rhode Island’s current 15 percent EITC,” said Senator Conley. “With reduced federal and state credits combined, working families stand to lose hundreds of dollars per year. Rhode Island can mitigate this effect by increasing our EITC from 15 to 20 percent. It is worth noting that three of every five recipients of the federal credit use it temporarily — for just one or two years at a time — while they get back on their feet.”
The measure now moves to the House of Representatives, where similar legislation (2019-H 5245) has been introduced by Rep. Scott A. Slater (D-Dist. 10, Providence).
For more information, contact:
Daniel Trafford, Publicist
State House Room 20
Providence, RI 02903