The bill amends the Rhode Island personal income tax law, specifically modifying the definition of Rhode Island income for resident individuals. It includes insertions such as adding certain types of income to the federal adjusted gross income, like interest from non-Rhode Island state obligations and amounts over $250,000 from forgiven Paycheck Protection Program loans. It also includes deletions, allowing for subtractions from the federal adjusted gross income for items such as interest on U.S. obligations, contributions to tuition savings programs with limitations, and a one-time subtraction for unreimbursed organ donation expenses. The bill details the conditions for these subtractions, including annual limits and carryover provisions for tuition savings programs, and specifies that the organ donation subtraction is not available to part-time residents or nonresidents.

Additionally, the bill revises the treatment of Social Security income for tax purposes. For tax years from January 1, 2016, to December 31, 2023, it allows individuals who have reached full retirement age and fall below certain income thresholds to subtract their Social Security benefits from their federal adjusted gross income. Starting January 1, 2024, the bill permits a subtraction of $20,000 of Social Security income for all individuals, aiming to provide tax relief. It also includes provisions for inflation adjustments and rounding rules for this and other retirement income types, such as pensions and annuities, and addresses military service pensions and investments in Rhode Island opportunity zones. The act will take effect upon passage.

Statutes affected:
2563: 44-30-12