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 introduces modifications to the federal adjusted gross income for state tax purposes, including the addition of interest income from out-of-state obligations, nonqualified withdrawals from tuition savings programs, and unemployment compensation. The bill also allows for subtractions related to contributions to tuition savings programs, certain withdrawals, and organ donation expenses, while establishing specific limitations and qualifications for these modifications, such as caps on contributions and conditions for claiming organ donation expenses.

Additionally, the bill proposes changes to the taxation of Social Security income and retirement benefits for individuals aged 65 and older, allowing exclusions for those with federal adjusted gross incomes below specified thresholds, which will increase starting in 2025. It also modifies the treatment of taxable retirement income from pension plans and annuities, allowing for exclusions that will rise over the coming years, and introduces provisions for military service pensions and adjustments for inflation. The bill aims to clarify and update the Rhode Island tax code, ensuring compliance with federal guidelines while providing state-specific tax benefits, and it is set to take effect upon passage.

Statutes affected:
776: 44-30-12