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 modifies the definition of Rhode Island income for resident individuals by adjusting what is added to and subtracted from the federal adjusted gross income 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. These additions are designed to increase the taxable income for Rhode Island residents in certain situations.

Conversely, the bill specifies subtractions from the federal adjusted gross income, such as interest on U.S. obligations, certain tuition savings program withdrawals, contributions to tuition savings programs (with limitations), and specific modifications for insurance benefits, organ donation expenses, and taxable Social Security income. These subtractions aim to decrease taxable income under certain conditions. The bill also introduces a phased approach to subtracting social security income from federal adjusted gross income over four years, starting with 20% in 2025 and reaching 80% by 2028. Additionally, it includes provisions for inflation adjustments and rounding rules for tax calculations. The bill is set to take effect immediately upon passage.

Statutes affected:
7588: 44-30-12