The bill amends Chapter 44-30 of the General Laws to introduce a new Child Tax Credit, effective for tax years beginning on or after January 1, 2027. Eligible taxpayers can claim a credit of $330 for each child under 18, with a phase-out mechanism based on adjusted gross income. The thresholds for this phase-out are set at $88,500 for single, married filing separately, head of household, or qualifying widow/widower taxpayers, and $110,640 for married filing jointly taxpayers. The bill also includes provisions for annual inflation adjustments to the credit and income thresholds, ensuring they remain relevant over time.

In addition to the Child Tax Credit, the bill establishes a high-income surtax on taxable income exceeding one million dollars, with rates progressively increasing from 1% in 2027 to 2% in 2028, and 3% in 2029. The bill outlines adjustments to existing tax credits and exemptions based on alternative minimum taxable income, with specific thresholds for different filing statuses. Furthermore, the Rhode Island earned-income credit will gradually increase from 10% to 16% of the federal earned-income credit over the coming years. The tax administrator is required to recalculate and submit necessary revisions to the tax code every three years, ensuring responsiveness to economic changes.

Statutes affected:
2823: 44-30-2.6