The bill amends Section 44-30-2.6 of the General Laws in Chapter 44-30, which governs Rhode Island's personal income tax. It introduces an additional tax of three percent (3%) on Rhode Island taxable income exceeding four hundred and thirty thousand dollars ($430,000) for various filing statuses, including married individuals filing joint returns, qualifying widow(er)s, heads of households, unmarried individuals, married individuals filing separate returns, and bankruptcy estates. This new tax will be imposed for the period January 1, 2026, through December 31, 2026, and for every year thereafter.

The bill includes provisions for annual inflation adjustments to the income threshold for the new tax bracket, which is intended to be in 2011 dollars, similar to the original bracket amounts specified in the existing law. The tax imposed will be in addition to the existing taxes on income and will not apply retroactively to any tax years prior to January 1, 2026, or to taxable income from prior tax years.

The existing three-bracket personal income tax structure will remain in place, and the new tax will take effect on January 1, 2026. The bill does not include any provisions for itemized and standard deductions, credits against the Rhode Island tax for certain federal credits and adoption expenses, or the treatment of capital gains and investment income for children under 18.

Statutes affected:
5473: 44-30-2.6