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 outlines modifications to the Rhode Island income of a resident individual, which is based on their federal adjusted gross income with specific adjustments. The bill proposes insertions that would increase federal adjusted gross income, such as adding certain types of interest income, nonqualified withdrawals, unemployment compensation not included in federal income, and amounts from forgiven Paycheck Protection Program loans over $250,000. Conversely, it includes deletions that would reduce federal adjusted gross income, such as subtracting interest income on U.S. obligations, certain tuition savings program transactions, and contributions to such programs within limits. A significant insertion is the phased-in subtraction for social security income, starting at 25% and reaching 100% by January 1, 2028, and a one-time subtraction for organ donors.

Furthermore, the bill introduces a new modification allowing taxpayers to subtract military service pension benefits from their federal adjusted gross income, effective from the tax year beginning on January 1, 2023. It also includes provisions for adjustments for inflation based on the consumer price index with a base year of 2000, with rounding down for increases not in multiples of fifty or twenty-five dollars. The modification for military service pensions is capped at the amount of the pension received. The bill is designed to take effect upon passage, indicating immediate changes to the tax code upon approval.

Statutes affected:
2158: 44-30-12