The bill amends Section 44-30-12 of the General Laws in Chapter 44-30, which governs the personal income tax for Rhode Island residents. It introduces new provisions regarding "Rhode Island income of a resident individual" and outlines various modifications that can affect federal adjusted gross income for state tax purposes. Key insertions include adjustments for Social Security income, eliminating the age requirement for such modifications, and establishing thresholds for tax benefits based on federal adjusted gross income.

Specifically, for tax years beginning on or after January 1, 2027, the bill provides that individuals with federal adjusted gross income below $80,000 (for unmarried individuals, heads of household, or married filing separately) or below $100,000 (for married individuals filing jointly or qualifying widow(er)s) may modify their income by an amount equal to the Social Security benefits includible in federal adjusted gross income.

The bill also addresses inflation adjustments for income modifications and specifies that starting from tax years on or after January 1, 2026, taxpayers may add back amounts that would have been deductible under 26 U.S.C. 174A, which was enacted in H.R.1 (Pub. L. 119-21) on July 4, 2025. Additionally, it clarifies the treatment of modifications for fiduciary adjustments and partnerships.

The act is designed to take effect immediately upon passage, streamlining the tax process for individuals and ensuring access to eligible deductions without age restrictions.

Statutes affected:
2365: 44-30-12
2365  SUB A: 44-30-12