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 tuition savings withdrawals, some unemployment compensation, and amounts over $250,000 from forgiven Paycheck Protection Program loans. Subtractions include interest on U.S. obligations, qualified 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 a carryover for excess tuition savings contributions and a one-time subtraction for unreimbursed organ donation expenses.

Furthermore, the bill includes a significant insertion that, starting January 1, 2025, allows individuals to subtract all Social Security income from their federal adjusted gross income, potentially reducing their taxable income. It also maintains provisions for annual inflation adjustments to income thresholds for Social Security and pension benefits, and addresses income modifications related to military service pensions and investments in Rhode Island opportunity zones. The act is intended to take effect immediately upon passage, making these changes effective as soon as the bill is enacted into law.

Statutes affected:
2061: 44-30-12