The bill amends Section 44-30-12 of the General Laws in Chapter 44-30, which governs the Rhode Island income tax for resident individuals, with new provisions set to take effect on January 1, 2025. It modifies the definition of Rhode Island income by adding various components to the federal adjusted gross income for state tax purposes, including interest income from out-of-state obligations, nonqualified withdrawals from tuition savings programs, and unemployment compensation. Additionally, it allows for subtractions related to contributions to tuition savings programs, certain withdrawals, and organ donation expenses, while also introducing specific limitations and qualifications for these modifications, such as caps on subtractions and conditions for claiming organ donation expenses.

Moreover, the bill introduces an exemption for pensions received by foreign service officers, allowing them to subtract their pension benefits from federal adjusted gross income starting in the tax year 2026. It also modifies the treatment of Social Security and retirement income, establishing income thresholds for tax modifications and annual inflation adjustments. The act aims to provide tax relief to specific groups, including foreign service officers and retirees, while ensuring that the modifications are aligned with federal guidelines and adjusted for inflation. The bill will take effect immediately upon passage.

Statutes affected:
106: 44-30-12