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 married individuals filing joint returns, qualifying widow(er)s, heads of household, 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 dollar amount of $430,000 is intended to be in 2011 dollars, and annual inflation adjustments will be applied to this amount.

The bill specifies that this additional tax will be imposed in addition to the existing taxes on income and that taxable income subject to this new tax will also be subject to the taxes imposed under the existing tax structure. There will be no difference in determining the total amount of taxable income for the existing tax brackets and the new tax.

Furthermore, the bill clarifies that the new tax will only apply to tax years beginning on or after January 1, 2026, and will not apply retroactively to any tax years prior to that date or to any taxable income from prior tax years.

The existing three-bracket personal income tax structure will remain in place, and the bill does not include any changes to the alternative minimum tax calculations, exemption amounts, tax tables, itemized deductions, standard deductions, capital gains treatment, or credits against the Rhode Island tax for certain federal credits and adoption.

This act is set to take effect on January 1, 2026.

Statutes affected:
5473: 44-30-2.6