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Rhode Island Tax Credits

Rhode Island boasts some of the most aggressive employment and training tax credit programs in the nation. The Department of Labor and Training (DLT), working in conjunction with the Economic Development Corporation, the Governor's Workforce Board-RI, and the Division of Taxation offers many impressive credit programs.

Here are a number of federal and state tax credits and grants. Each is linked to more specific information, including purpose, requirements, maximum amount, and administering agencies. More information can be obtained by contacting your Employer Service Representative.

  Name

Maximum Credit

  Work Opportunity Tax Credit $2,400 for each new adult hire $9,000 for each new long-term family assistance recipient hired over a two-year period
 
  Jobs Training Tax Credit
$5,000 per employee over 3 years
 
  Jobs Growth Act
Tax exemption on 50% of
employees bonuses
 
  Investment Tax Credit
Credit for up to half of tax liability
 
  Apprenticeships
$4,800 per employee
 
  New Employment Tax Incentive
$2,400 per employee
 

 


The Work Opportunity Tax Credit (download brochure | download Veterans brochure)


Tax Relief and Health Care Act of 2006 Public Law 109-432 (pdf, may take a while to download) 12/20/06
Small Business and Work Opportunity Tax Act of 2007 H.R. 1591 (pdf) 5/25/2007

US Dept. of Labor, Employment and Training Admin. - Work Opportunity Tax Credit Eligible New Hires


Employers Hiring Veterans by Year’s End May Get Expanded Tax Credit - Click here to learn more.

Purpose
To promote the hiring of certain targeted groups of job seekers.

Summary
Employers that hire individuals that are members of one specific target group may be eligible to receive a tax credit of $2,400 per individual. In general, the target groups include qualified Temporary Assistance to Needy Families (TANF) recipients, some veterans, recipients of vocational rehabilitation services, food stamp recipients, qualified ex-felons and Supplemental Security Income (SSI) recipients.

Qualifying employers must file IRS form 8850 and ETA form 9061 or 9062 with the DLT. The Department must certify that there is documentary evidence verifying that the individual qualifies in one of the targeted groups for employment categories.



Investment Tax Credits

For Manufacturing
Title 44-31, Regulation CR 03-02
  For High Performance Businesses
Title 44-31, Regulation CR 03-02

Purpose

To allow manufacturers a tax credit against the business corporation tax and RI personal income tax for property used for the production of goods by manufacturing, processing or assembling.
 
Purpose

To allow a tax credit to High Performance businesses in the manufacturing, wholesale, finance, insurance, real estate industries as well as high performing businesses in others industries named specifically in the statute.


To certify for this tax credit, one of the following criteria must be met: the employer’s median annual wage paid to its full-time equivalent employees must be greater than the average annual wage paid by all employers in the state in the same two-digit SIC Code or corresponding NAICS code; the employer’s median annual wage paid to its full-time equivalent employees is greater than or equal to 125 percent of the average annual wage paid by all employers in the state; for manufacturing employers only - the average annual wage paid to the employer’s full-time equivalent employees classified as production workers (as defined by the Department of Labor and Training) is greater than the average annual wage paid to all production workers in the state in the same two-digit SIC code or corresponding NAICS code. The firm invests 2 percent of total payroll costs in worker training.

Applications/Forms
Investment Tax Credit Certification Form

Administering Agencies:
RI Dept. of Labor and Training | RI Human Resource Investment Council of the Governor's Workforce Board-RI | RI Division of Taxation

For more information- www.dlt.ri.gov/lmi/business/invtax.htm

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Job Training Tax Credit

The Rhode Island Jobs Training Tax Credit Act
Title 42, Chapter 64.6

NOTE: Effective January 1, 2011, the Rhode Island Jobs Training Tax Credit Program can no longer be calimed on RI Personal Income Tax Returns.

Purpose
To grant a tax credit against the corporate income tax equal to 50 percent of actual training expenses for new and current employees, up to $5,000 per employee, over three years.

Summary
Companies are eligible for a tax credit of 50 percent of actual training expenses for new and current employees, up to $5,000 per employee, over three years, for their investments in retraining or upgrading the skills of their employees. Training programs must be pre-approved by the Human Resource Investment Council. Employees must work at least 30 hours per week at the time of the training, make 150 percent of the Rhode Island minimum wage at completion and be retained for 18 months for the company to qualify.

Employers must confirm that employees are "qualified" working a minimum of 30 hours per week and at the completion of training are earning no less than 150 percent of the hourly RI minimum wage. The training programs are approved based on requirements in law and as required by HRIC regulation.

Applications/Forms
Job Training Tax Credit Application (election)
Rules and Regulations
Request for Letter of Good Standing


Administering Agencies
The Rhode Island Human Resource Investment Council of the Governor's Workforce Board-RI
The Rhode Island Division of Taxation


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The Jobs Growth Act

Rhode Island General Law 05-054

Purpose
To provide tax incentives for employees of large companies

Summary
This public law would allow companies that employee 100 or more new workers, with a new payroll of at least $10 million, to offer their employees tax exemptions on half the money they make in bonuses. Companies offering the program would need to show that the employees make more than 125 percent of the state's average wage. An application for certification would be filed with the Rhode Island Economic Development Corporation.

Administering Agencies:
Economic Development Corporation | RI Department of Labor and Training | RI Division of Taxation

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Job Training Tax Credit - Apprenticeships

Business Corporation Tax
Title 44-11-41

Purpose
To allow a tax credit of 50 percent of actual wages paid to a qualifying apprentice or $4,800, whichever is less.

Summary
Employers that hire an apprentice as a machine toolmaker, machinist, model-maker, gage maker, pattern-maker, plastic process technician, tool and machine setter, die-sinker, mold-maker, tool & die maker, and similar occupations may be eligible for a tax credit of 50 percent of actual wages or $4,800, whichever is less. The apprentice must be enrolled in a registered qualified program through the Rhode Island Department of Labor and Training's State Apprenticeship Council.

Applications/Forms
DLT-L-20 Form Apprenticeship Agreement Form
Apprenticeship Council Informational Data Form
Apprenticeship Agreement for Employer
Standards Packet of Apprenticeship
Apprenticeship Ratio Sheet

Administering Agencies:
RI Department of Labor and Training | RI State Apprenticeship Council | RI Division of Taxation |
US Dept. of Labor, Federal Bureau of Apprenticeship and Training

For more information- www.dlt.ri.gov/apprenticeship or RI Employers' Apprenticeship Tax Credit Brochure (pdf)

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New Employment Tax Incentive

Purpose
To allow a tax incentive in the form of a deduction or modification of 40% of the employee's first year wages up to $2,400 per employee.


Law
http://webserver.rilin.state.ri.us/Statutes/title44/44-55/44-55-4.HTM

Summary
Effective January 1, 1998, an incentive in the form of a deduction or modification is available to businesses who hire employees who are Rhode Island residents and who have been "unemployed" as defined in Paragraph III, Section 2 of this regulation. Once each employee has been employed by the business for a minimum of 52 consecutive calendar weeks, has a minimum of 1,820 hours of paid employment and is certified by the Department of Labor and Training, the business shall be entitled to take this incentive.

Applications/Forms
Instructions
Application, Rev. 5/12

Administering Agencies:
RI Department of Labor and Training | RI Division of Taxation

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RI Department of Labor and Training
Business Workforce Center
Center General Complex
1511 Pontiac Avenue, Cranston, RI 02920


Phone: 1 (888) 616-JOBS
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