Bill > H5474

This bill modifies the Rhode Island tax code to gradually increase the percentage of Social Security income that can be subtracted from an individual's federal adjusted gross income over a four-year period, beginning in tax year 2026. Specifically, the bill allows taxpayers to subtract 20% of Social Security income in 2026, increasing to 40% in 2027, 60% in 2028, and reaching 80% in 2029. This change applies to individuals who have reached the age for full Social Security retirement benefits and meet certain income thresholds (currently less than $80,000 for single filers or $100,000 for joint filers). The modification is designed to provide tax relief for retirees by reducing the taxable portion of their Social Security income, with the percentage exemption increasing incrementally each year until 80% of Social Security income can be subtracted from the taxpayer's adjusted gross income. The bill takes effect immediately upon passage and represents a phased approach to making Social Security income more tax-friendly for eligible Rhode Island residents.

Budget and Finance

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