2024 -- S 2575

========

LC004768

========

     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2024

____________

A N   A C T

RELATING TO TAXATION -- PERSONAL INCOME TAX -- CHILD TAX CREDIT

     Introduced By: Senators Cano, Gallo, Lauria, Lawson, Euer, McKenney, Mack, Murray,
Zurier, and Pearson

     Date Introduced: March 01, 2024

     Referred To: Senate Finance

     It is enacted by the General Assembly as follows:

     SECTION 1. Legislative findings.

     1. The health and wellbeing of Rhode Island children and their families are critical to the

future of our state;

     2. Children, youth, and their caregivers are experiencing challenges exacerbated by the

pandemic leading to increasing educational, behavioral health crises, as well as inflationary

pressures exacerbating homelessness, and food insecurity;

     3. Research has shown that child tax credits contribute to promotion of work, reduction of

poverty, and enhanced child development;

     4. Research has shown that child tax credits are associated with reductions in family

stressors and state-level maltreatment reports;

     5. Research has shown that child tax credit income is used to supplement basic household

needs and children's essentials;

     6. Fourteen states including Massachusetts have child tax credits and other states have

pending proposals in their state legislatures, including Connecticut. According to research by the

Institute on Taxation and Economic Policy, a combination of the existing federal child tax credit

and a state credit would slash child poverty rates.

     SECTION 2. Section 44-30-2 of the General Laws in Chapter 44-30 entitled "Personal

Income Tax" is hereby amended to read as follows:

     44-30-2. Rate of tax.

     (a) General.

     (1)(i) A Rhode Island personal income tax is imposed upon the Rhode Island income of

residents and nonresidents, including estates and trusts, for the period January 1, 1971 through June

30, 1971 equal to twenty percent (20%) of one-half (½) of the taxpayer’s federal income tax liability

for the taxable year commencing January 1, 1971; for the period July 1, 1971 through December

31, 1971 equal to fifteen percent (15%) of one-half (½) of the taxpayer’s federal income tax liability

for the taxable year commencing January 1, 1971; and for each taxable year on and after January

1, 1972, and ending on or before December 31, 1974 equal to fifteen percent (15%) of the

taxpayer’s federal income tax liability; for each taxable year on and after January 1, 1975 and

ending on or before December 31, 1977 equal to seventeen percent (17%) of the taxpayer’s federal

income tax liability; for each taxable year ending after December 31, 1977 equal to nineteen percent

(19%) of the taxpayer’s federal income tax liability; for each taxable year ending after December

31, 1980 equal to nineteen and twenty-four one-hundredths percent (19.24%) of the taxpayer’s

federal income tax liability; for each taxable year ending after December 31, 1981 equal to twenty-

one and nine-tenths percent (21.9%) of the taxpayer’s federal income tax liability; for the period

January 1, 1983 through June 30, 1983 equal to twenty-seven and five-tenths percent (27.5%) of

the taxpayer’s federal income tax liability; for the period July 1, 1983 and through June 30, 1984

equal to twenty-six percent (26%) of the taxpayer’s federal income tax liability; for the period July

1, 1984 and through December 31, 1984 equal to twenty-four and nine-tenths percent (24.9%) of

the taxpayer’s federal income tax liability; in accordance with subsection (2) of this section for the

period January 1, 1985 through June 30, 1985 equal to twenty-three and sixty-five one-hundredths

percent (23.65%) of the taxpayer’s federal income tax liability; for the period July 1, 1985 through

December 31, 1985, equal to twenty-two and sixty-five one-hundredths percent (22.65%) of the

taxpayer’s federal income tax liability; in accordance with subsection (3) of this section for January

1, 1986 and thereafter shall be equal to twenty-two and twenty-one one-hundredths percent

(22.21%) of the taxpayer’s federal income tax liability; in accordance with the Tax Reform Act of

1986, codified primarily at 26 U.S.C. § 1 et seq., for the period January 1, 1987 through June 30,

1987 shall be equal to twenty-three and ninety-six one-hundredths percent (23.96%) of the

taxpayer’s federal income tax liability; for the period July 1, 1987 through December 31, 1990 shall

be equal to twenty-two and ninety-six one-hundredths percent (22.96%) of the taxpayer’s federal

income tax liability; for the period January 1, 1991 through June 30, 1992 and for the period January

1, 1994 and thereafter shall be equal to twenty-seven and five tenths percent (27.5%) of the

taxpayer’s federal income tax liability; for the period July 1, 1992 through December 31, 1992 if

the taxpayer’s federal income tax liability is fifteen thousand dollars ($15,000) or less shall be equal

LC004768 - Page 2 of 8

to twenty-seven and five tenths percent (27.5%) of the taxpayer’s federal income tax liability but

if the taxpayer’s federal income tax liability is greater than fifteen thousand dollars ($15,000) shall

be the sum of twenty-seven and five-tenths percent (27.5%) of the taxpayer’s federal income tax

liability up to and including fifteen thousand dollars ($15,000) and thirty-two percent (32%) of the

taxpayer’s federal income tax liability in excess of fifteen thousand dollars ($15,000).

     (ii) The effective rate for the year 1983 shall be equal to twenty-six and seventy-five

hundredths percent (26.75%) of the taxpayer’s federal income tax liability. The effective rate for

the year 1984 shall be equal to twenty-five and five-tenths percent (25.5%) of the taxpayer’s federal

income tax liability.

     (iii) The effective rate for the year 1985 shall be equal to twenty- three and fifteen-

hundredths percent (23.15%) of the taxpayer’s federal income tax liability. The effective rate for

the year 1987 shall be twenty-three and forty-six one-hundredths percent (23.46%) of the

taxpayer’s federal income tax liability.

     (iv) For the year 1992, if the taxpayer’s federal income tax liability for the year is greater

than fifteen thousand dollars ($15,000), the effective rate on such the federal income tax liability

in excess of fifteen thousand dollars ($15,000) shall be twenty-nine and seventy-five one-

hundredths percent (29.75%).

     (v) The personal income tax rate for the year 1993 shall be in accordance with the following

schedules:

SCHEDULE X-RI: Single Individuals

FEDERAL INCOME TAX LIABILITY RI INCOME TAX

Over But not Over Pay + % On Excess Of The Amount Over-

$0 - $15,000 $0 27.5% $0

15,000 - 31,172 4,125 32% 15,000

31,172 - 79,772 9,300 27.55% 31,172

79,772 22,689 25.05% 79,772 

     The above rate table may not be used by a taxpayer who files a federal Schedule D and has

taxable income in excess of $115,000.00. Those individuals must file a Rhode Island Schedule D.

SCHEDULE Y-1-RI: Married Filing Jointly or Qualifying Widow(er)

FEDERAL INCOME TAX LIABILITY RI INCOME TAX

Over But not Over Pay + % On Excess Of The Amount Over-

$0 - $15,000 $0 27.5% $0

15,000 - 35,929 4,125 32% 15,000

35,929 -75,528 10,822 27.55% 35,928

LC004768 - Page 3 of 8

75,528 21,732 25.05% 75,528  

     The above rate table may not be used by a taxpayer who files a federal Schedule D and has

taxable income in excess of $140,000.00. Those individuals must file a Rhode Island Schedule D.

SCHEDULE Y-2-RI: Married Filing Separately

FEDERAL INCOME TAX LIABILITY RI INCOME TAX

Over But not Over Pay + % On Excess Of The Amount Over-

$0 - $15,000 $0 27.5% $0

15,000 - 17,964 4,125 32% 15,000

17,964 -37,764 5,073 27.55% 17,964

37,764 10,528 25.05% 37,764

     The above rate table may not be used by a taxpayer who files a federal Schedule D and has

taxable income in excess of $70,000.00. Those individuals must file a Rhode Island Schedule D.

SCHEDULE Z-RI: Head of Household

FEDERAL INCOME TAX LIABILITY RI INCOME TAX

Over But not Over Pay + % On Excess Of The Amount Over-

$0 - $15,000 $0 27.5% $0

15,000 - 33,385 4,125 32% 15,000

33,385 -77,485 10,008 27.55% 33,385

77,485 22,158 25.05% 77,485    

     The above rate table may not be used by a taxpayer who files a federal Schedule D and has

taxable income in excess of $127,500.00. Those individuals must file a Rhode Island Schedule D.

RI INCOME TAX RATE SCHEDULES FOR USE BY ESTATES AND TRUSTS

FEDERAL INCOME TAX LIABILITY RI INCOME TAX

Over But not Over Pay + % On Excess Of The Amount Over-

$0 - $1,405 $0 27.5% $0

1,405 - 2,125 386 23.68% 1,405

2,125 -15,000 557 21.53% 2,125

15,000 3,329 25.05% 15,000

     The above rate table may not be used by a taxpayer who files a federal Schedule D and has

taxable income in excess of $5,500.00. Those individuals must file a Rhode Island Schedule D.

     (vi) The purpose of the 1993 rate schedules and/or the Rhode Island Schedule D shall be

such that a taxpayer’s 1993 Rhode Island personal income tax liability shall remain the same as it

would have been prior to the enactment of the Federal Omnibus Budget Reconciliation Act of 1993,

(OBRA), P.L. 103-66, 107 Stat. 312.

LC004768 - Page 4 of 8

     (vii) For the year 1994 through December 31, 1997, the rate shall be twenty-seven and five-

tenths percent (27.5%) of the taxpayers entire federal income tax liability.

     (viii) For the period January 1, 1998, through December 31, 1998, the rate shall be equal

to twenty-seven percent (27%) of the taxpayer’s federal income tax liability.

     (ix) For the period January 1, 1999, through December 31, 1999, the rate shall be equal to

twenty-six and five-tenths (26.5%) of the taxpayer’s federal income tax liability.

     (x) For the period January 1, 2000, through December 31, 2000, the rate shall be equal to

twenty-six percent (26%) of the taxpayer’s federal income tax liability.

     (xi) For the period January 1, 2001, through December 31, 2001, the rate shall be equal to

twenty-five and five-tenths percent (25.5%) of the taxpayer’s federal income tax liability.

     (xii) For the period January 1, 2002, and thereafter the rate shall be twenty-five percent

(25%) of the taxpayer’s federal income tax liability.

     (2) In the event that the indexing of the federal personal income tax scheduled to take effect

on January 1, 1985, as enacted by the Economic Recovery Tax Act of 1981, 26 U.S.C. § 1 et seq.,

does take effect or is replaced by similar legislation, as the result of an action of the United States

Congress, then the Rhode Island personal income tax rate as set forth in subdivision (a)(1) of this

section for the period January 1, 1985, and through June 30, 1985, shall be changed and be equal

to twenty-three and sixty-five one-hundredths percent (23.65%) of the taxpayer’s federal income

tax liability.

     (3) In the event that the indexing of the federal personal income tax scheduled to take effect

on January 1, 1986, as enacted by the Economic Recovery Tax Act of 1981, 26 U.S.C. § 1 et seq.,

does take effect or is replaced by similar legislation as the result of an action of the United States

Congress, then the Rhode Island personal income tax rate as set forth in subdivision (a)(1) of this

section for the period January 1, 1986, and thereafter shall be changed and be equal to twenty-two

and twenty-one one-hundredths percent (22.21%) of the taxpayer’s federal income tax liability.

     (b) Federal income tax liability. Federal income tax liability shall be the amount of federal

income tax without deduction for any new federal credit(s) enacted after January 1, 1996,

(excluding self-employment tax, social security tax or any supplemental Medicare premium) or

supplemental premium surcharge imposed by the Medicare Catastrophic Coverage Act of 1988

(P.L. 100-360), codified primarily at 42 U.S.C. § 1395 et seq., which the taxpayer would have been

liable if the taxpayer had paid federal income tax based on federal taxable income as adjusted by

the modifications provided in parts II and III of this chapter. The federal taxable income shall not

include modifications which would decrease federal taxable income resulting from the applications

of § 15 of chapter 489 of the public laws of 1923, as amended by § 8 of chapter 151 of the public

LC004768 - Page 5 of 8

laws of 1963; §§ 28-17-3, 36-10-32, 45-21-45, or any other sections of Rhode Island law which

would provide or would be construed to provide that any pension, annuity, retirement allowance,

benefit, or right shall be exempt from any state tax.

     (c) Cross references. For credit in respect of:

     (1) Taxes withheld on wages, see § 44-30-73;

     (2) Taxes imposed on a resident by other states, see § 44-30-18;

     (3) Taxes overpaid for a prior taxable year, see § 44-30-86.

     (d) Tax credit.

     (1) There shall be allowed as a credit against the Rhode Island personal income tax

otherwise due for a taxable year, commencing for the tax year 1988, a contribution of five dollars

($5.00), or ten dollars ($10.00) if married and filing a joint return, to the account for the public

financing of the electoral system. The first two dollars ($2.00), or four dollars ($4.00) if married

and filing a joint return, shall go to a political party as defined in § 17-12.1-12 to be designated by

the taxpayer or to a nonpartisan account if so indicated up to a total of two hundred thousand dollars

($200,000) collectively for all parties and the nonpartisan account. The remainder shall be

deposited as general revenue.

     (2) The credit for the public financing of the electoral system shall appear on the face of

the state personal income tax return. The tax administrator shall annually forward by August 1, all

contributions to said account to the state general treasurer and the treasurer shall annually remit by

September 1, the designated partisan contributions to the chairperson of the appropriate political

party and the contributions made to the nonpartisan general account shall be allocated by the state

general treasurer to each political party in proportion to the combined number of votes its

candidates for governor received in the previous election, after five percent (5%) of the amount in

the account is allocated to each party for each general officer elected in the previous statewide

election. Each political party may expend moneys received under this provision for all purposes

and activities permitted by the laws of Rhode Island and the United States, except that no such

moneys shall be utilized for expenditures to be directly made or incurred to support or defeat a

candidate in any election within the meaning of chapter 25 of title 17, or in any election for any

political party nomination, or for political party office within the meaning of chapter 12 of title 17.

The remaining funds shall be allocated for the public financing of campaigns for governor as set

forth in §§ 17-25-19 — 17-25-27.

     (3) Child tax credit. A taxpayer that maintains a household that includes at least one

individual up to age eighteen (18) years, who qualifies as a dependent, as defined in section 26 U.S.

Code § 152, shall be allowed a tax credit for each such dependent, to be computed as provided in

LC004768 - Page 6 of 8

this chapter, against the tax imposed by chapters 30 of this title. The amount of the credit shall be:

     (i) For dependent(s) up to age eighteen (18) a tax credit of one thousand dollars ($1,000)

shall be allowed per dependent;

     (ii) No credit shall be allowed pursuant to this chapter unless the taxpayer claiming said

child tax credit has a total income for the taxable year that does not exceed one hundred thousand

dollars ($100,000) for a single-filer household and one hundred fifty thousand dollars ($150,000)

for a dual-filer household.

     (iii) If the amount of the credit allowed under this section exceeds the taxpayer’s tax

liability, the division of taxation shall treat the excess as an overpayment and shall pay the taxpayer

the entire amount of the excess.

     (e) Tax adjustment.

     (1) Notwithstanding the provisions of subsection (a) of this section, for taxable years

ending after December 31, 1980, in the event that during a period when the general assembly is not

in session a change is made in the provisions of the Internal Revenue Code of the United States and

amendments thereto, or other provisions of the law of the United States relating to federal income

taxes, or the rules and regulations issued under these laws that alters the taxpayer’s federal income

tax liability, the tax administrator is directed to so change the Rhode Island personal income tax

rate of the taxpayer's federal income tax liability as to retain the tax product upon receipt of which

state appropriations were predicated.

     (2) The rate so set by the tax administrator will be effective until such time as the general

assembly shall ratify this rate or set a different rate.

     SECTION 3. This act shall take effect upon passage.

========

LC004768

========

LC004768 - Page 7 of 8

EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO TAXATION -- PERSONAL INCOME TAX -- CHILD TAX CREDIT

***

     This act would establish a child tax credit of one thousand dollars ($1,000) per dependent.

No credit would be allowed unless the taxpayer claiming said child tax credit has a total income

for the taxable year that does not exceed one hundred thousand dollars ($100,000) for a single-filer

household and one hundred fifty thousand dollars ($150,000) for a dual-filer household. If the

amount of the credit allowed under this section exceeds the taxpayer’s tax liability, the division of

taxation shall treat the excess as an overpayment and shall pay the taxpayer the entire amount of

the excess.

     This act would take effect upon passage.

========

LC004768

========

LC004768 - Page 8 of 8