The bill amends Section 44-30-12 of the General Laws in Chapter 44-30, which governs personal income tax for residents in Rhode Island. It introduces a phased approach to modifying federal adjusted gross income by allowing individuals to subtract a percentage of social security income starting in 2026. Specifically, individuals may subtract 25% of social security income for tax years beginning on or after January 1, 2026; 50% for tax years beginning on or after January 1, 2027; 75% for tax years beginning on or after January 1, 2028; and 100% for tax years beginning on or after January 1, 2029.

The bill also includes provisions for other types of income adjustments, such as interest from out-of-state obligations, unemployment compensation, and forgiven Paycheck Protection Program loans exceeding $250,000. It addresses nonqualified withdrawals from tuition savings programs, specifying conditions for these amounts to be included in federal adjusted gross income. Additionally, the bill contains adjustments for military service pensions, organ donation expenses, and taxable retirement income. It accounts for federal income tax deductions disallowed under 26 U.S.C. 280E, as well as adjustments for beneficiaries of estates or trusts and partners in partnerships, all aimed at providing tax relief for Rhode Island residents. The act is set to take effect upon its passage.

Statutes affected:
183: 44-30-12