The bill amends Section 44-30-12 of the General Laws in Chapter 44-30, which pertains to "Personal Income Tax" in Rhode Island. It revises the definition of Rhode Island income for resident individuals by specifying additions and subtractions to the federal adjusted gross income (AGI) for state income tax purposes. 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 carryover provisions), and specific modifications for insurance benefits for dependents, organ donation expenses, and taxable Social Security income.

The bill also updates the income modification for Social Security benefits and pension/annuity income for tax years beginning on or after January 1, 2016. It raises the federal AGI thresholds for excluding Social Security income from state taxes to $125,000 for individuals and $170,000 for joint filers for tax years starting January 1, 2024. For pension and annuity income, the modification increases from $15,000 to $20,000 for tax years beginning on or after January 1, 2023, with provisions for annual inflation adjustments. The bill would take effect upon passage and includes updates to references to the federal AGI as it relates to modifications of taxable retirement income from certain pension plans or annuities.

Statutes affected:
2058: 44-30-12