The bill seeks to amend the "Personal Income Tax" law in Rhode Island by modifying the definition of Rhode Island income for resident individuals. It proposes changes to what is added to and subtracted from the federal adjusted gross income to calculate state income tax. 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 introduces limitations on tuition savings contributions and a carryover for excess contributions, as well as a one-time subtraction for unreimbursed organ donation expenses.

Furthermore, the bill inserts a new provision for a deduction from federal adjusted gross income for interest payments on student loans. It also ensures that any rebate issued under § 44-30-103 is considered in the gross income for federal tax purposes. The bill details income modifications for individuals at full Social Security retirement age, adjusts for inflation, and provides rounding rules for non-multiple increases. It also addresses modifications for investment in opportunity zones and military service pensions, allowing a subtraction for military pension benefits. The bill aims to reduce tax liability for those paying student loan interest and is set to take effect upon passage.

Statutes affected:
7120: 44-30-12