How PolicyEngine's CTC Calculator informed Rhode Island Governor McKee's Child Tax Credit design

Prior to the release of Rhode Island Governor Dan McKee's FY2027 budget, his office used PolicyEngine's new Rhode Island Child Tax Credit Calculator to evaluate how different CTC designs would affect Rhode Island families and the state's economy. The tool, commissioned by the Niskanen Center, helps policymakers analyze potential CTC reforms, including the proposal the Governor ultimately adopted in his budget.

The Niskanen Center, having previously used PolicyEngine's free tools for a range of policy simulations, commissioned us to build a specialized calculator for Rhode Island's tax structure. Building on our foundational microsimulation model and expanding use of the Claude Code agentic AI system, we built a web app for simulating reforms that could adjust the state's existing personal exemption and introduce a child tax credit.

The Rhode Island CTC Calculator allows users to model how different Child Tax Credit parameters—including credit amounts, age eligibility, refundability, and phase-out structures—would affect both individual households and the state as a whole. Users can input their own household characteristics to see personalized impacts or examine statewide effects on state revenues, income distribution, and poverty.

This tool exemplifies PolicyEngine's approach to policy analysis: providing transparent, accessible modeling that empowers policymakers, advocates, and the public to understand the trade-offs inherent in policy design. Use the calculator below:

The Niskanen Center tested the calculator and used it to evaluate how different CTC parameters would affect Rhode Island households across the income distribution. They then shared the tool with Governor Dan McKee's office, which used the calculator to evaluate reform options and design the Child Tax Credit proposal included in his fiscal year 2027 budget.

"I'm grateful to the PolicyEngine team for building the models that helped us see clearly how different policy choices would affect Rhode Island families. That ability to test options in real time strengthened our proposal and helped us design a Child Tax Credit that will deliver more than $30 million each year to the families who need it most."

— Rhode Island Governor Dan McKee

On January 13th, Governor McKee announced the proposal during his State of the State address. The $325 fully refundable Child Tax Credit for children under 19 would:

• Cost the state $36.7 million
• Benefit 29.2% of Rhode Island residents
• Reduce child poverty by 2.1%

For a detailed analysis of the Governor's proposal, including household-level impacts and distributional effects, see our full policy analysis.

The same tool used by Governor McKee's office is available to the public. Whether you're a policymaker evaluating alternatives, an advocate assessing impacts on the populations you serve, or a Rhode Island resident curious about how reforms would affect your family, you can use the Rhode Island CTC Calculator to explore these questions yourself.

We invite policymakers and organizational leaders from other states interested in these types of tools to reach out to us. We welcome the opportunity to work with you and build customized analytical tools to support your policy goals.