The bill amends the General Laws in Chapter 44-30, "Personal Income Tax," to update the definition of "Rhode Island taxable income" and the tax rates for various income levels and filing statuses. It excludes the increase in the basic standard deduction amount for married couples filing joint returns from the Jobs and Growth Tax Relief Reconciliation Act of 2003 and the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA). The bill sets Rhode Island personal income tax rates as a percentage of federal income tax rates prior to EGTRRA, with specific rates for tax years 2001 and 2002 and adjustments for inflation from 2002 onwards. It also outlines tax rates for different filing statuses, addresses the Rhode Island alternative minimum tax, and specifies standard deduction amounts and additional deductions for individuals aged 65 or older or blind.

The bill includes provisions for itemized deductions, exemption amounts, and the alternative minimum tax, with phase-outs and inflation adjustments. It imposes additional taxes on certain federal tax situations and defines the cost-of-living adjustment based on the consumer price index (CPI). The bill increases the Rhode Island earned-income credit from 16% to 30% of the federal credit for tax years beginning on or after January 1, 2025, and makes this credit refundable. It also requires the tax administrator to recalculate and submit revisions every three years. The bill specifies rounding rules for tax increases and lists various federal credits that entitle taxpayers to a credit against Rhode Island tax, with no deduction for federal credits enacted after January 1, 1996. The act is set to take effect upon passage and clarifies that the earned-income tax credit increase is for tax years 2025 and beyond.

Statutes affected:
7589: 44-30-2.6