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 who have never owned a home save money for their first home purchase. Under the program, Rhode Islanders could open a dedicated savings account and set aside money specifically for buying their first home. The key benefit is a state tax advantage — meaning the 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 would allow savers to exclude up to $50,000 in contributions and up to $150,000 in interest and dividends earned from these accounts from their state taxable income. In practical terms, this means a person saving for their first home could potentially lower their Rhode Island state tax bill by sheltering a significant amount of money from taxation while it grows in this special account.

This bill primarily affects Rhode Islanders who are looking to buy their first home and are currently in the saving stage. It could be particularly helpful for people who are building savings over several years and want a tax incentive to encourage that process. Financial institutions that might offer these accounts could also be affected. The bill has been introduced and sent to the Senate Finance Committee, where lawmakers will review its potential costs and benefits before deciding whether to move it forward.