Financial Incentives

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 Economic Development Corporation, the Governor’s Workforce Board-RI, and the Division of Taxation offers many impressive credit programs.

The following 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.

Work Opportunity Tax Credit – $2,400 for each new adult hire $9,000 for each new long-term family assistance recipient hired over a two-year period

  • 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.  

 Jobs Training Tax Credit   – $5,000 per employee over 3 years

  • Companies are eligible for a tax credit of 50 percent of actual training expenses for new and current employees, up to $5,000 per employee, over three years, for their investments in retraining or upgrading the skills of their employees. Training programs must be pre-approved by the Human Resource Investment Council. Employees must work at least 30 hours per week at the time of the training, make 150 percent of the Rhode Island minimum wage at completion and be retained for 18 months for the company to qualify.
  • Employers must confirm that employees are “qualified” working a minimum of 30 hours per week and at the completion of training are earning no less than 150 percent of the hourly RI minimum wage. The training programs are approved based on requirements in law and as required by HRIC regulation.

Jobs Growth Act – Tax exemption on 50% of employees’ bonuses

  • 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.

Investment Tax Credit – Credit for up to half of tax liability

  • Allows manufacturers a tax credit against the business corporation tax and RI personal income tax for property used for the production of goods by manufacturing, processing or assembling.
  • Allows a tax credit to high performance businesses in the manufacturing, wholesale, finance, insurance, real estate industries as well as high performing businesses in others industries named specifically in the statute.
  •  To certify for this tax credit, one of the following criteria must be met: 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 two-digit SIC Code or corresponding NAICS code; 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; 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 two-digit SIC code or corresponding NAICS code. The firm invests 2 percent of total payroll costs in worker training.