The bill seeks to amend Section 44-30-12 of the General Laws in Chapter 44-30, which pertains to "Personal Income Tax" in Rhode Island. It proposes changes to the definition of Rhode Island income for resident individuals by specifying additions and subtractions to the federal adjusted gross income for state income tax calculations. Additions include interest from non-Rhode Island state obligations, certain dividends, nonqualified withdrawals from tuition savings programs, unemployment compensation not included in federal income, and amounts over $250,000 from forgiven Paycheck Protection Program loans. Subtractions include interest on U.S. obligations, certain tuition savings withdrawals, contributions to tuition savings programs (with limitations), and specific modifications for insurance benefits, organ donation expenses, and taxable Social Security income. The bill also introduces a carryover for contributions to tuition savings programs that exceed the annual limit and allows a one-time subtraction for unreimbursed organ donation expenses.

Furthermore, the bill adds a new provision for foreign service officers, allowing them to subtract their pension benefits from their federal adjusted gross income for state tax purposes starting January 1, 2024. The definition of "foreign service officer" is referenced according to various U.S. Codes and Regulations. The bill includes adjustments for inflation based on the consumer price index with a base year of 2000 for certain income thresholds, modifications for taxable retirement income from pension plans or annuities, and a modification for military service pensions. These adjustments are rounded down to the nearest multiple of $50 or $25, depending on the filing status. The act is intended to take effect upon passage and aims to exempt foreign service officer pensions from state income tax.

Statutes affected:
253: 44-30-12