WeVote
Log In

Bill

Bill

SB 2364

AN ACT RELATING TO TAXATION -- PERSONAL INCOME TAX

2026 Regular Session Introduced by Jonathon Acosta and 9 co-sponsors

The bill expands Rhode Island earned-income credit to 30% of the federal EIC starting in 2027 to boost support for low- to moderate-income workers.

05/28/2026 Committee recommended measure be held for further study
0
WeVote Research Nonpartisan
Bill Summary · SB 2364

Overview

  • Bill: SB 2364
  • Jurisdiction: Rhode Island
  • Session: 2026
  • Subject: Personal Income Tax
  • Introduced: January 30, 2026; referred to Senate Finance
  • Main intent: Update Rhode Island’s personal income tax structure, reinstate and modify standard/itemized deductions and exemptions, preserve and adjust various credits, and notably increase the Rhode Island earned-income credit (EIC) to 30% of the federal EIC starting in 2027.

Purpose and Policy Goals

  • Align Rhode Island tax calculations with federal provisions while applying Rhode Island-specific modifications.
  • Enhance support for low- to moderate-income workers via a higher Rhode Island EIC (targeted at 30% of the federal EIC from 2027 onward).
  • Preserve existing targeted tax credits while clarifying which credits apply against Rhode Island tax.

Key Provisions and Changes

  • Rhode Island Taxable Income (44-30-2.6)

    • Reaffirms that Rhode Island taxable income uses federal taxable income as adjusted, with specific references to prior EGTRRA-related changes and inflation adjustments.
    • Establishes RI tax rates and brackets (married joint, head of household, single, and married filing separately) with progressive rates culminating in a top rate of 9.90% on the excess over higher thresholds.
    • Maintains capital gains treatment and maximum capital gains rates.

  • Standard and Itemized Deductions

    • Reintroduces a RI standard deduction schedule (varying by filing status) and adds age/blindness adjustments.
    • Sets limits on standard deduction for dependents and certain filers (zero for some categories, e.g., nonresident aliens, estates/trusts).
    • Provides an overall limitation on itemized deductions for high AGI (with 3% of excess or 80% of deductions, whichever is smaller) and defines applicable AGI thresholds, inflation adjustments, and phase-out mechanics.

  • Exemptions

    • Establishes an exemption amount (initially $3,400 per exemption, with inflation adjustments).
    • Phases out exemptions as AGI rises above defined threshold levels, with thresholds varying by filing status.

  • Alternative Minimum Tax (AMT)

    • Maintains RI AMT calculations anchored to federal AMT concepts, with Rhode Island-specific exemption amounts and phase-out schedules.
    • Includes special provisions for married filing separately.

  • Credits Against Tax

    • Reiterates that only certain credits may be used against RI tax (as listed), including RI EIC, Property Tax Relief, Lead Paint, credits for taxes paid to other states, Historic Structures, Motion Picture Production, Child and Dependent Care, Scholarship contributions, various targeted credits, and several program-specific credits.
    • Child/Dependant Care credit is 25% of the federal credit, limited to RI tax liability.
    • Stay Invested in RI Wavemaker, Rebuild RI, and RI Qualified Jobs credits are explicitly listed.
    • Specific rules for withholding tax credits and adoption credits apply.

  • Earned-Income Credit (EIC)

    • Rhode Island EIC is a fraction of the federal EIC (25% previously, with gradual increases in later years).
    • Notably, the bill would increase the RI EIC to 30% of the federal EIC starting in tax year 2027 and would maintain a refundable portion when the credit exceeds RI tax liability.
    • Step-downs and interaction with RI tax liability are specified.

  • Other Provisions

    • Requires periodic recalibration/revisions by the Tax Administrator to align with the general assembly (every three years after 2010, per the text).
    • Specifies various timing, inflation-adjustment, and rounding rules for COLA and standard deduction/ exemption amounts.

Affected Parties

  • Rhode Island residents and nonresidents subject to RI personal income tax (including estates and trusts).
  • Taxpayers eligible for federal credits that interact with RI credits (e.g., EIC, child/dependent care, adoption credits).
  • Tax professionals and the RI Department of Revenue due to changes in deduction, exemption, and credit calculations.

Procedural and Timeline Aspects

  • Effective date: The act takes effect upon passage.
  • Administrative updates: Tax administrator to recalculate and submit revisions to the General Assembly every three years for inclusion in statute (as directed in § 44-30-2.6).
  • The bill includes a scheduled 2027 implementation milestone for the EIC increase.

Summary

SB 2364 proposes a comprehensive refresh of Rhode Island’s personal income tax structure, reinforcing federal alignment while adjusting deductions, exemptions, and credits. A centerpiece is the expansion of the RI earned-income credit to 30% of the federal EIC beginning in 2027, aiming to augment support for low- to moderate-income workers. The bill also clarifies and recalibrates standard/itemized deduction rules, exemption phasing, AMT, and a set of targeted credits, with inflation indexing and periodic administrative updates to keep the framework current.

Compiled from official sources — confirm details with the bill’s official record.

Sign in to ask a question.