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. It defines a resident individual's Rhode Island income as their adjusted gross income for federal tax purposes, with specific modifications. Notable insertions include the addition of interest income from out-of-state obligations, nonqualified withdrawals from tuition savings programs, and forgiven Paycheck Protection Program loans exceeding $250,000 to increase federal adjusted gross income. Conversely, the bill allows for reductions in federal adjusted gross income through subtractions for contributions to tuition savings programs and a phased approach to subtracting social security income, starting at 25% in 2026 and reaching 100% by 2029.

Additionally, the bill introduces provisions for organ donation expenses, allowing individuals to deduct up to $10,000 from their federal adjusted gross income for unreimbursed costs related to organ donation. It also modifies the treatment of taxable retirement income from certain pension plans, allowing for gradual increases in subtractions based on age and income thresholds. The bill further allows taxpayers to subtract military service pension benefits from their federal adjusted gross income starting from the 2023 tax year. Overall, the bill aims to provide tax relief to residents, particularly seniors and organ donors, while encouraging investment in Rhode Island opportunity zones.

Statutes affected:
183: 44-30-12