The bill amends the Rhode Island General Laws regarding personal income tax, specifically modifying the definition of Rhode Island income for resident individuals. It outlines both additions and subtractions to 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. Subtractions include interest on U.S. obligations, certain tuition savings withdrawals, contributions to tuition savings programs (with limitations), and specific modifications for insurance benefits, organ donation expenses, and taxable Social Security income. The bill also introduces limitations on tuition savings contributions and a carryover for excess contributions, as well as a one-time subtraction for unreimbursed organ donation expenses.

Furthermore, the bill increases the modification for taxable retirement income from certain pension plans or annuities. For tax years beginning on or after January 1, 2023, and until January 1, 2024, the modification increases from $15,000 to $20,000, and for tax years beginning on or after January 1, 2025, it increases to $50,000. These modifications are for individuals who have reached the age for full Social Security retirement benefits and whose federal adjusted gross income is below certain thresholds. The bill also provides for annual inflation adjustments to these amounts, using the consumer price index for all urban consumers, and includes provisions for other modifications related to Rhode Island investment in opportunity zones, military service pensions, and rebates issued under ยง 44-30-103. The act will take effect upon passage.

Statutes affected:
2960: 44-30-12