Rep. Cotter, Sen. Ujifusa submit bill raising ‘circuit breaker’ tax credit to help seniors, those with disabilities

State House – Sen. Linda L. Ujifusa and Rep. Megan Cotter are sponsoring a bill to provide relief to some of the state’s most vulnerable households by raising the eligibility limit and the maximum credit for the “circuit breaker” tax credit, which benefits low-income seniors and individuals with disabilities.

“Rhode Islanders with low incomes are bearing the heaviest burdens of our housing crisis, as well as paying a far greater share of their income under our regressive tax structure. For those with fixed incomes, such as seniors and people with disabilities, higher housing costs can mean they are going without other necessities to keep a roof over their heads. They need relief. Raising the limits on the circuit breaker credit is a very effective, targeted way to help many of the households who are facing the greatest housing cost burdens,” said Senator Ujifusa (D-Dist. 11, Portsmouth Bristol).

The circuit breaker credit program provides an income tax credit to low-income Rhode Island homeowners and renters who are over 65 or disabled, equal to the amount that their property tax exceeds a certain percent of their income. That percent ranges from 3 to 6 percent, based on household income. In the case of renters, a figure representing 20 percent of their annual rent is used in the place of property tax in the calculation.

Currently, the program is limited to households with annual incomes of $35,000 or less, and the credit is limited to $600.

The legislation Representative Cotter and Senator Ujifusa have introduced (2024-H 7208, 2024-S 2063) would raise the income limit to $50,000 and raise the maximum credit to $850.

Massachusetts has a circuit breaker tax credit program for seniors with much higher limits: Eligibility includes those with incomes as high as $103,000 for couples filing jointly, and up to $2,590 can be claimed. While the sponsors would like to see higher limits in Rhode Island, they chose a level that they believe stands a better chance of passage given current budget limitations.

The sponsors say the dramatic rise in housing costs necessitates an increase to the limits of the program.

“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.”