The bill amends the General Laws in Chapter 44-30, which pertains to Personal Income Tax in Rhode Island. It revises the definition of "Rhode Island taxable income" to exclude certain increases in the basic standard deduction for married couples filing jointly, as outlined in federal tax acts from 2001 and 2003. The bill sets Rhode Island personal income tax rates as a percentage of federal income tax rates prior to the enactment of the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA), with rates being 25.5% for the tax year 2001 and 25% for 2002 and subsequent years. It also adjusts rate schedules for inflation starting in the tax year 2002 and specifies tax brackets and rates for various filing statuses. Insertions in the bill include specific tax rates and brackets, while deletions remove previous language to make way for new provisions.

Additionally, the bill details the phase-out of itemized deductions and exemption amounts for high-income individuals, the alternative minimum tax (AMT) calculations, and the taxation of unearned income for minors. It sets the standard deduction for certain taxpayers to zero and caps the basic standard deduction. The bill introduces a new provision for investment tax credits for eligible shareholders and members of S-corporations and LLCs in manufacturing, based on wage criteria and NAICS codes, effective retroactively from the tax year 2022. It also outlines the Rhode Island earned-income credit as a percentage of the federal credit, with a refundable credit for excess amounts. The act is effective upon passage and applies retroactively from January 1, 2022, with the intent to authorize a retroactive tax credit for the tax year 2022 and onwards for certain taxpayers.

Statutes affected:
3032: 44-30-2.6