This bill amends Section 44-30-12 of the General Laws to clarify and update the provisions related to Rhode Island income for resident individuals and the modifications that apply to their federal adjusted gross income. The bill adds new language stating that the Rhode Island income of a resident individual means their adjusted gross income for federal income tax purposes, with specified modifications. The bill includes a list of modifications that increase federal adjusted gross income, such as interest income on obligations of any state other than Rhode Island, interest or dividend income on obligations or securities of the United States, and the amount of a nonqualified withdrawal made from an account in the tuition savings program. The bill also includes modifications that reduce federal adjusted gross income, such as interest income on obligations of the United States and its possessions and contributions made to an account under the tuition savings program.

The bill also proposes to increase the federal adjusted gross income threshold for modification for taxable social security income. Currently, individuals who have attained the age used for calculating full or unreduced Social Security retirement benefits and have a federal adjusted gross income below $80,000 (if unmarried) or $100,000 (if married filing jointly) can receive a modification for their social security benefits. This bill would extend this provision to tax years beginning on or after January 1, 2023. Additionally, the bill includes provisions for the modification of taxable retirement income from certain pension plans or annuities. The threshold for receiving a modification for pension and/or annuity income would increase from $15,000 to $20,000 for tax years beginning on or after January 1, 2023. The bill also includes adjustments for inflation and rounding rules for these modifications.

Statutes affected:
6010: 44-30-12