This bill proposes several changes to the Rhode Island tax code. It includes changes to the definition of "Rhode Island taxable income" and the rates of tax imposed on residents and nonresidents. The bill also includes provisions for alternative minimum tax, adjustments for inflation, maximum capital gains rates, and itemized deductions.

The bill sets the basic standard deduction for individual taxpayers at the greater of $850 or the sum of $300 and the individual's earned income. It also eliminates the standard deduction for certain individuals, such as married individuals filing separately if either spouse itemizes deductions, nonresident alien individuals, and estates or trusts. The bill includes adjustments for inflation, increases certain dollar amounts in the tax code based on the cost-of-living adjustment, and establishes an overall limitation on itemized deductions for individuals whose adjusted gross income exceeds a certain threshold amount. The bill also sets the exemption amount for taxpayers at $3,400, with adjustments for inflation, and imposes an alternative minimum tax. Finally, the bill imposes taxes on certain Rhode Island taxes, such as lump-sum distributions and the recapture of federal tax credits previously claimed on Rhode Island returns.

Statutes affected:
5470: 44-30-2.6