Establishes the first time home buyer savings program act. Allows modifications to federal adjusted gross income for $50,000 in contributions and $150,000 of interest and dividends included in federal adjusted gross income.

Rhode Island First-Time Home Buyer Savings Program

This bill would create a special savings program in Rhode Island designed to help people purchase their first home. Under the program, residents could open a dedicated savings account specifically for home-buying costs, such as a down payment or closing costs. The key benefit is a state tax break: money contributed to these accounts, as well as certain earnings from those accounts, would not be counted as taxable income on Rhode Island state tax returns.

Specifically, the bill allows savers to exclude up to $50,000 in contributions to these accounts from their Rhode Island taxable income. Additionally, up to $150,000 in interest and dividends earned within the account could also be excluded from state taxes. This means qualifying savers could keep more of their money by reducing what they owe in state income taxes each year they contribute to the account.

This bill primarily affects Rhode Island residents who have never owned a home and are actively saving to buy one. It is designed to make homeownership more financially accessible by giving first-time buyers a tax incentive to set aside money. Financial institutions that offer these types of savings accounts could also be impacted by the program's rules and regulations.

The bill has been introduced and sent to the House Finance Committee for review, meaning it is still in the early stages of the legislative process and has not yet become law.