The bill introduces a new "First Time Home Buyer Savings Program Act" as Chapter 50 in Title 34 of the General Laws, aimed at assisting individuals in saving for their first home purchase. The program, managed by the general treasurer, division of taxation, and state investment commission, allows participants to contribute up to $50,000, which can be deducted from their federal adjusted gross income. Additionally, up to $150,000 of interest and dividend income can also be deducted. Withdrawals from the savings account are permitted for the qualified purchase of a first home, but non-qualified withdrawals will result in the loss of tax benefits and taxation at the normal rate. The bill also amends Section 44-30-12 of the General Laws in "Personal Income Tax" to include these provisions.

The bill further modifies Rhode Island's personal income tax law, allowing for various subtractions from federal adjusted gross income to determine state tax liability. These include the subtraction of certain exempt interest income, contributions to the state's tuition savings program, and up to $10,000 for living organ donors' unreimbursed expenses. It also adjusts the taxable Social Security income for those at full retirement age with income below specific thresholds and increases the allowable subtraction for certain pension plan or annuity income to $20,000 for eligible individuals. The bill exempts up to $20,000 of pension and annuity income for qualifying individuals and allows for the deduction of military service pension benefits from the 2023 tax year. The act is effective upon passage, meaning these changes will be implemented immediately once the bill is signed into law.

Statutes affected:
2556: 44-30-12