The bill amends the Rhode Island General Laws regarding personal income tax, specifically updating the definition of "Rhode Island taxable income" and adjusting the tax rates for various income levels and filing statuses. It excludes the increase in the basic standard deduction for married couples filing jointly from the definition of Rhode Island taxable income, as provided in federal tax acts from 2001 and 2003. The bill sets Rhode Island personal income tax rates as a percentage of federal income tax rates prior to those acts, with specific rates for the tax years 2001 and 2002, and includes adjustments for inflation starting in the tax year 2002. It also outlines the tax brackets, standard deductions, itemized deductions, exemption amounts, and alternative minimum tax (AMT) rules, with provisions for inflation adjustments and phase-outs.

Additionally, the bill details the credits available to Rhode Island taxpayers, including the Rhode Island earned-income credit, which is set to increase to 17% and 18% of the federal credit in 2025 and 2026, respectively. It also specifies rounding rules for tax increases and lists various federal credits that are deductible against the state tax, with the exception of federal credits enacted after January 1, 1996, except for the federal adoption credit. The bill mandates that the tax administrator recalculate and submit revisions to the general assembly every three years. The act will take effect immediately upon passage, and it does not include any new legal language insertions or deletions in the provided summary text.

Statutes affected:
2054: 44-30-2.6