Rhode Island Tax Credits

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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 Rhode Island Commerce, 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.

    Work Opportunity Tax Credit

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    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 long-term unemployed.

    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.

    Applications/Forms

    Forms must be submitted within 28 calendar days of the employee's start date

    Administering Agencies

    Contact the Business Workforce Center by visiting our RI WOTC Website.

    General WOTC information

    Jobs Growth Act

    Law

    Rhode Island General Law 05-054

    Purpose

    To provide tax incentives for employees of large companies

    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

    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.

    Administering Agencies

    For more information visit or RI Employers' Apprenticeship Tax Credit Brochure (pdf)

    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

    Tax Incentives for Employers

    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

    Administering Agencies