Rhode Island Earned Income Credit

The Rhode Island Earned Income Credit is a state tax credit that adds to the federal Earned Income Tax Credit. The Rhode Island percentage is 16 percent of your federal credit, and it is administered by the RI Division of Taxation, which publishes the forms and instructions at tax.ri.gov.

The most useful fact is that it is refundable. Because the credit is reported in the payments and credits section of your return, any amount that is larger than the tax you owe is refunded to you. So it can put cash in your pocket even if you owe no state tax.

It starts with the federal credit. To claim the Rhode Island credit, you must first qualify for and claim the federal Earned Income Credit, because the state credit is figured directly from your federal amount. If you do not claim the federal credit, there is no state credit to take.

The math is short. On RI Schedule EIC, you enter your federal Earned Income Credit, multiply it by 16 percent, and carry the result to line 14d of the RI-1040. The schedule walks you through each line, so you do not need to guess.

There is one filing step to remember. You must complete RI Schedule EIC and attach it to your RI-1040 return, or the credit will not be applied. Free tax preparation through VITA, which 211 can help you find, can complete both the federal and state pieces for you.

This is a tax credit, so the calendar is tax season, not an application window. File your Rhode Island return, claim the federal credit first, and attach the schedule. If you missed it on a past return, ask a tax preparer whether you can still amend.