This bill proposes several changes to the tax code in Rhode Island. 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. It sets the basic standard deduction for individual taxpayers and eliminates the standard deduction for certain individuals. The bill also includes adjustments for inflation, establishes an overall limitation on itemized deductions, and sets the exemption amount for taxpayers. It imposes an alternative minimum tax and includes provisions for the treatment of unearned income of minor children. 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.

This bill also makes changes to the tax code in Rhode Island. It specifies that any increase in taxes that is not a multiple of $50 will be rounded down to the nearest multiple of $50. It allows taxpayers who are eligible for certain federal tax credits to also receive a credit against their Rhode Island tax. It establishes a Rhode Island earned-income credit for taxpayers who are eligible for the federal earned-income credit. The bill also makes changes to the tax rates and deductions, imposing a tax on taxable income based on a graduated rate schedule. It specifies the standard deduction amounts for different filing statuses and provides for a reduction in the standard deduction for taxpayers with adjusted gross income over $175,000. The bill also establishes an exemption amount based on the number of exemptions allowed for federal income tax purposes, with a reduction for taxpayers with adjusted gross income over $175,000. The bill adds a new income tax bracket for Rhode Island state income taxation, which would be a rate of 11.90% on taxable income over $375,000 (adjusted for inflation).

Statutes affected:
553: 44-30-2.6