Increases the federal adjusted gross income threshold for modification for taxable social security income. Amends references to federal adjusted gross income as pertains to modification of taxable retirement income from certain pension plans or annuities.

Plain-English Summary

This bill makes changes to how Rhode Island taxes the retirement income of its residents. Specifically, it raises the income threshold that determines whether someone's Social Security benefits can be partially or fully excluded from Rhode Island state taxes. In other words, more retirees who receive Social Security could qualify to have some or all of that income exempt from state taxation, depending on how much total income they earn.

The bill also updates the rules around how certain other types of retirement income — such as payments from pension plans or annuities — are taxed at the state level. It adjusts the references used to calculate eligibility for tax relief on that income, which could affect how much of a retiree's pension or annuity payments are subject to Rhode Island income tax.

The people most directly affected by this bill are Rhode Island residents who are retired or approaching retirement and receive income from Social Security, pensions, or annuities. If passed, the changes could reduce the state tax burden for some retirees, particularly those with moderate incomes who currently fall just above the existing threshold. The bill has been introduced and referred to the Senate Finance Committee, where it will be reviewed before any further action is taken.