The bill amends Chapter 44-30 of the General Laws to establish a new Child Tax Credit, effective for tax years beginning on or after January 1, 2027. Eligible taxpayers, defined as natural persons domiciled in the state who file a Rhode Island state personal income tax return, can claim a credit of $650 for each child under the age of 18, provided their exemption amount is zero. The credit will be reduced for taxpayers with an adjusted gross income exceeding $261,000, with the reduction calculated at 20 percentage points for each $7,450 (or fraction thereof) by which the taxpayer's adjusted gross income exceeds this threshold.

The bill also includes provisions for annual inflation adjustments to the credit amount, using a base tax year of 2026 and the consumer price index to determine the cost-of-living adjustment. If any increase is not a multiple of five dollars, it will be rounded down to the nearest multiple of five dollars.

Additionally, the bill modifies Section 44-30-2.6, specifying that the exemption amount for a claimed child dependent will be zero for tax years beginning on or after January 1, 2027, with the credit provided instead. Overall, the proposed changes aim to enhance tax relief for families with children while clarifying the tax credit process in the state.

Statutes affected:
8338: 44-30-2.6