Includes payment of social security benefits to the modification reducing federal adjusted gross income on personal income taxes.

Rhode Island Social Security Tax Relief Bill

This bill would change how Social Security benefits are treated when calculating Rhode Island state income taxes. Currently, Rhode Island residents may have to pay state income tax on a portion of their Social Security benefits if their overall income is high enough. This legislation would allow Social Security benefit payments to be used as a deduction that reduces a person's taxable income for Rhode Island state tax purposes.

In practical terms, this means that Rhode Islanders who receive Social Security benefits could subtract some or all of those benefit payments from the income figure used to calculate what they owe in state taxes. This would likely result in lower state tax bills for affected residents, or potentially no state taxes owed on those benefits at all, depending on a person's individual financial situation.

The people most directly affected by this bill would be Rhode Island residents who receive Social Security benefits — primarily retirees and people with disabilities — and who currently earn enough income that some of their Social Security benefits are subject to state taxation. For many seniors living on fixed incomes, this change could mean keeping more money in their pockets each year. The bill has been introduced and referred to the House Finance Committee, where it will be reviewed before any further action is taken.