Allows a modification to federal adjusted gross income of $25,000 of social security income for tax years beginning on or after January 1, 2026.

Rhode Island Bill Summary: Social Security Income Tax Exemption

This bill would have allowed Rhode Island residents to subtract up to $25,000 of their Social Security income when calculating their state income taxes, starting with the 2026 tax year. In practical terms, this means that if someone receives Social Security benefits, they could reduce the amount of that income counted toward their Rhode Island state taxes by up to $25,000, potentially lowering their overall state tax bill.

This bill would primarily affect Rhode Island retirees and others who receive Social Security benefits, such as people with disabilities or surviving family members of deceased workers. For many of these residents — particularly those on fixed incomes — the change could mean meaningful savings on their annual state tax bill. The benefit would be most significant for lower- and middle-income Social Security recipients, since those with very low incomes may already owe little or no state taxes.

It is worth noting that this bill was withdrawn at the sponsor's request after being introduced and referred to the Senate Finance Committee. This means the bill did not advance through the legislative process and did not become law. The reasons for the withdrawal were not specified. Similar proposals to reduce or eliminate state taxes on Social Security income have been considered in many states, as advocates argue it helps retirees on fixed incomes, while opponents sometimes raise concerns about the impact on state revenue.