This bill amends Section 44-30-2.6 of the General Laws in Chapter 44-30 entitled "Personal Income Tax." The amendment includes changes to the Rhode Island taxable income rate of tax. It specifies that Rhode Island taxable income means federal taxable income as determined under the Internal Revenue Code, not including the increase in the basic, standard-deduction amount for married couples filing joint returns. The bill also imposes a Rhode Island personal income tax on the taxable income of residents and nonresidents at a rate of 25.5% for tax year 2001 and 25% for tax year 2002 and thereafter. It provides rate schedules for different income levels and filing statuses. The bill also includes provisions for alternative minimum tax and adjustments for inflation.

In addition, the bill adds new language to specify the maximum capital gains rates and itemized deductions. It allows individuals who do not itemize their deductions to take a standard deduction, with different amounts based on filing status. It also provides an additional standard deduction for individuals age 65 or older.

This bill proposes several changes to the tax code. It increases the standard deduction for individuals who are blind or older, with the amount being $1,300 for unmarried individuals and $1,050 for married individuals. It also limits the basic standard deduction for certain dependents, stating that it cannot exceed $850 or the sum of $300 and the individual's earned income.

The bill also includes provisions for the overall limitation on itemized deductions, stating that the amount of itemized deductions allowable for a taxable year shall be reduced by either 3% of the excess of adjusted gross income over the applicable amount or 80% of the amount of itemized deductions otherwise allowable. The applicable amount is determined based on filing status and is subject to adjustments for inflation.

Additionally, the bill addresses the alternative minimum tax, imposing a tax equal to the excess of the tentative minimum tax over the regular tax. The tentative minimum tax is calculated based on a percentage of the taxable excess, which is the federal alternative minimum taxable income modified by certain adjustments. The bill also includes provisions for the exemption amount, which is subject to reductions based on the taxpayer's alternative minimum taxable income exceeding the threshold amount.

Overall, this bill aims to make adjustments to the tax code to ensure fairness and accuracy in tax calculations.

This bill amends current law regarding tax credits and deductions. It specifies that the term "consumer price index" refers to the last consumer price index for all urban consumers published by the Department of Labor. It also establishes rounding rules for tax increases and provides for specific federal credits that taxpayers are entitled to. The bill also allows for a credit against Rhode Island tax for adoption and sets the credit amount at 25% of the federal credits. It also establishes an earned-income credit for taxpayers entitled to a federal earned-income credit, with the credit amount varying depending on the tax year. The bill also imposes a tax on taxable income and provides tables for determining the tax amount based on income brackets. It also establishes deductions for Rhode Island Basic Standard Deduction and exemption amounts. The bill also provides for adjustments for inflation for certain dollar amounts.

This bill proposes to create a new income tax bracket for Rhode Island income taxation. The new bracket would be 11.90% on taxable income over $500,000. The bill also specifies the credits that are allowed against the tax imposed under this chapter, including credits for earned-income, property tax relief, lead paint abatement, income taxes of other states, historic structures, motion picture productions, child and dependent care, contributions to scholarship organizations, tax withheld, Stay Invested in RI Wavemaker Fellowship, Rebuild Rhode Island, Rhode Island Qualified Jobs Incentive Program, and historic homeownership assistance. The bill would take effect on January 1, 2024.

Statutes affected:
19: 44-30-2.6