A new bill has been introduced that would raise the eligibility limit and maximum credit for the circuit breaker tax credit. The bill was sponsored by Sen. Linda Ujifusa and Rep. Megan Cotter.
Currently, the circuit breaker tax credit is only available to households making $35,000 a year or less. The credit is also limited to $600. The proposed bill would increase the eligibility limit to $50,000 and raise the maximum credit to $850.
The circuit breaker tax credit provides an income tax credit to low-income Rhode Island homeowners and renters who are over the age of 65 or disabled. The credit is based on the amount of a household’s property taxes that exceeds a certain percentage of their income. The percentage ranges from 3 to 6 percent based on household income. For renters, 20 percent of their annual rent is used as a substitute for property taxes in the calculation.
Ujifusa said that the higher income limit is necessary because the cost of housing has been rising significantly over the past few years. She believes that the increase will help many seniors and people with disabilities afford their homes.
“We are at a point where there are hardly any communities in our state where a household making $50,000 can afford an average two-bedroom apartment. People trying to make ends meet on that level of income need more help. Extending the circuit breaker credit to more of them should absolutely be part our state’s strategy for addressing our housing affordability crisis,” said Representative Cotter (D-Dist. 39, Exeter, Richmond, Hopkinton).
“With the median home price in Rhode Island doubling in the last five years, housing has risen to be one of the top issues concerning our older population. Rhode Island property taxes are some of the highest in the nation and are especially burdensome for the many older Rhode Islanders who rely on fixed-incomes and for those on Social Security Disability. Census data shows 32% of older Rhode Island home owners and 52% of those who rent are paying more than 30% of their income for housing costs,” said Senior Agenda Coalition Policy Director Maureen Maigret. “Increasing the circuit breaker tax credit or refund is a simple way to ease the housing cost burdens for them.”
The proposed changes are expected to be discussed in the coming weeks.
Generative artificial intelligence (AI) assisted a What’sUpNewp journalist with the reporting included in this story.
