Rhode Island Law, Section 44-31-1 provides for a 10 Percent Investment Tax Credit, which may be applied toward the Rhode Island business corporation tax and the personal income tax. This credit is available to employers classified in manufacturing, wholesale trade, finance, insurance, real estate and selected services industries. In order to be eligible for the credit, the employer must be paying above average wages or investing significantly in employee training. In addition, more than half of the revenue of non-manufacturing firms must come from out-of-state sales or sales to the federal government.
According to our understanding of the law, employers may qualify for the 10% Investment Tax Credit by meeting one of the following four criteria:
- 1. 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 three-digit NAICS* code (table), OR
- 2. 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 (125 percent of the average annual wage paid to all covered workers in 2019 was equal to $67,786), OR
- 3. 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 three digit NAICS* code (table).
Download Certification Forms for tax year 2020 or tax year 2019 for option 1,2 or 3
- 4. The firm invests at least 2 percent of total payroll costs in worker training.
The employer is responsible for calculating its median annual wage paid to its full-time equivalent employees (or the average wage paid to its production workers for criteria #3) and providing it to us. Our Department does not have the necessary information to perform these calculations.
If you believe you meet criteria #4 to qualify for the tax credit, submit a completed copy of this form specifying total wages, total amount spent on training, and the computation of the percent spent on training to:
Governor's Workforce Board-RI
1511 Pontiac Avenue
Cranston, RI 02920
Phone (401) 462-8860
Fax (401) 462-8865
or email a copy to DLT.GWBINFO@dlt.ri.gov
*The selected NAICS codes corresponds to the two-digit SIC codes cited in Rhode Island Law, Section 44-31-1