Rhode Island

Rhode Island Treats Poor Families Under Its Income Tax Better Than Many States

 

Rhode Island’s 1999 income tax threshold — the income level at which families begin paying income tax:	Ranking among 42 states with income taxes
For two-parent families of four: $25,400.	4th highest (tie)
For single-parent families of three: $23,900.	4th highest (tie)
Rhode Island’s 1999 income tax on working-poor and near-poor families:
No tax on families with incomes at the poverty line ($17,028 for family of four, $13,290 for family of three).
No tax on families of three or four with full-time minimum-wage earnings ($11,232).
No tax on families of three or four with incomes at 125% of the poverty line ($21,285 for family of four, $16,613 for family of three).
The only states with more favorable income tax treatment of working-poor and near-poor families are states that have refundable income tax credits.
Rhode Island has consistently exempted families with below-poverty earnings from the income tax. As Rhode Island’s tax threshold for families of four has increased during the 1990s, the threshold has risen further above the poverty line. (See chart.) In 1991, a family of four owed no tax until its income reached 25 percent above the poverty line. Rhode Island’s threshold now has risen to 49 percent above the poverty line.