Rep. Cotter, Sen. Ujifusa submit bill raising ‘circuit breaker’ tax credit to help seniors, those 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 $40,730 or less, and the credit is limited to $700.
The legislation Representative
Cotter and Senator Ujifusa have introduced (2026-H 7700, 2026-S 2031) 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 $112,000 for couples filing jointly, and up to $2,820 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. They add that past
fiscal analyses that measure only revenue loss fail to take into account
the substantial savings that occur when family caregivers help loved ones avoid
costly institutional care.
“We are at a point where there isn’t a single community in
Rhode Island where a household making less than $60,000 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 one out of four older Rhode Island homeowners are housing
cost-burdened (paying more than 30% of their income on housing
costs) as are almost half of older renters,” said Senior Agenda Coalition
Policy Advisor Maureen Maigret. “Increasing the circuit breaker tax credit
or refund is a simple way to ease the housing cost burdens for them.”