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S2823A
2026 -- S 2823 SUBSTITUTE A
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LC005297/SUB A
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STATE OF RHODE ISLAND
IN GENERAL ASSEMBLY
JANUARY SESSION, A.D. 2026
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A N A C T
RELATING TO TAXATION -- PERSONAL INCOME TAX
Introduced By:
Senators Vargas, Lawson, Murray, DiPalma, DiMario, Quezada, Acosta,
Urso, and Lauria
Date Introduced:
March 04, 2026
Referred To:
Senate Finance
It is enacted by the General Assembly as follows:
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SECTION 1. Chapter 44-30 of the General Laws entitled "Personal Income Tax" is hereby
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amended by adding thereto the following section:
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44-30-104. Child Tax Credit.
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(a) Definitions. As used in this section:
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(1) “Child” means an individual who is eighteen years of age or under as of December 31
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of the tax year.
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(2) “Eligible taxpayer” means any natural person or persons domiciled in this state who
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filed a Rhode Island state personal income tax return for the tax year.
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(b) Child Tax Credit. For tax years beginning on or after January 1, 2027, a tax credit in
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the amount of three hundred thirty dollars ($330) shall be allowed for each claimed child on the
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resident tax return of the eligible taxpayer.
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(c) Child Tax Credit Phase Out
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(1) In the case of any eligible taxpayer filing a return as a single, married filing separately,
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head of household, or qualifying widow/widower taxpayer whose adjusted gross income, as
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modified pursuant to § 44-30-12, for the taxable year beginning on or after January 1, 2027,
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exceeds eighty-eight thousand five hundred dollars ($88,500), the credit amount shall be reduced
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by the applicable percentage. The term “applicable percentage” for purposes of this subsection
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means twenty (20) percentage points for each two thousand eight hundred seventy-five ($2,875)
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(or fraction thereof) by which the eligible taxpayer’s adjusted gross income for the taxable year
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exceeds eighty-eight thousand five hundred dollars ($88,500).
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(2) In the case of any eligible taxpayer filing a return as married filing jointly taxpayer
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whose adjusted gross income, as modified pursuant to § 44-30-12, for the taxable year beginning
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on or after January 1, 2027, exceeds one hundred ten thousand six hundred forty dollars ($110,640),
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the credit amount shall be reduced by the applicable percentage. The term “applicable percentage”
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for purposes of this subsection means twenty (20) percentage points for each three thousand five
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hundred ninety dollars ($3,590) (or fraction thereof) by which the eligible taxpayer’s adjusted gross
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income for the taxable year exceeds one hundred ten thousand six hundred forty dollars ($110,640).
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(d) Adjustment for inflation. The dollar amounts contained in subsections (b) and (c) of
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this section shall be increased annually by an amount equal to:
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(I) Such dollar amounts contained in subsections (b) and (c) of this section adjusted for
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inflation using a base tax year of 2026, multiplied by;
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(II) The cost-of-living adjustment with a base year of 2026.
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(III) For the purposes of this section, the cost-of-living adjustment for any calendar year is
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the percentage (if any) by which the consumer price index for the preceding calendar year exceeds
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the consumer price index for the base year. The consumer price index for any calendar year is the
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average of the consumer price index as of the close of the twelve-month (12) period ending on
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August 31, of such calendar year.
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(IV) For the purpose of this section the term “consumer price index” means the last
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consumer price index for all urban consumers published by the department of labor. For the purpose
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of this section the revision of the consumer price index that is most consistent with the consumer
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price index for calendar year 1986 shall be used.
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(V) If any increase determined under this section is not a multiple of five dollars ($5.00),
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such increase shall be rounded to the next lower multiple of five dollars ($5.00).
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SECTION 2. Sections 44-30-2.6 and 44-30-12 of the General Laws in Chapter 44-30
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entitled "Personal Income Tax" are hereby amended to read as follows:
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44-30-2.6. Rhode Island taxable income — Rate of tax.
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(a) “Rhode Island taxable income” means federal taxable income as determined under the
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Internal Revenue Code, 26 U.S.C. § 1 et seq., not including the increase in the basic, standard-
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deduction amount for married couples filing joint returns as provided in the Jobs and Growth Tax
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Relief Reconciliation Act of 2003 and the Economic Growth and Tax Relief Reconciliation Act of
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2001 (EGTRRA), and as modified by the modifications in § 44-30-12.
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(b) Notwithstanding the provisions of §§ 44-30-1 and 44-30-2, for tax years beginning on
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or after January 1, 2001, a Rhode Island personal income tax is imposed upon the Rhode Island
LC005297/SUB A - Page 2 of 18
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taxable income of residents and nonresidents, including estates and trusts, at the rate of twenty-five
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and one-half percent (25.5%) for tax year 2001, and twenty-five percent (25%) for tax year 2002
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and thereafter of the federal income tax rates, including capital gains rates and any other special
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rates for other types of income, except as provided in § 44-30-2.7, which were in effect immediately
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prior to enactment of the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA);
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provided, rate schedules shall be adjusted for inflation by the tax administrator beginning in taxable
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year 2002 and thereafter in the manner prescribed for adjustment by the commissioner of Internal
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Revenue in 26 U.S.C. § 1(f). However, for tax years beginning on or after January 1, 2006, a
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taxpayer may elect to use the alternative flat tax rate provided in § 44-30-2.10 to calculate his or
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her personal income tax liability.
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(c) For tax years beginning on or after January 1, 2001, if a taxpayer has an alternative
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minimum tax for federal tax purposes, the taxpayer shall determine if he or she has a Rhode Island
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alternative minimum tax. The Rhode Island alternative minimum tax shall be computed by
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multiplying the federal tentative minimum tax without allowing for the increased exemptions under
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the Jobs and Growth Tax Relief Reconciliation Act of 2003 (as redetermined on federal form 6251
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Alternative Minimum Tax-Individuals) by twenty-five and one-half percent (25.5%) for tax year
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2001, and twenty-five percent (25%) for tax year 2002 and thereafter, and comparing the product
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to the Rhode Island tax as computed otherwise under this section. The excess shall be the taxpayer’s
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Rhode Island alternative minimum tax.
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(1) For tax years beginning on or after January 1, 2005, and thereafter, the exemption
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amount for alternative minimum tax, for Rhode Island purposes, shall be adjusted for inflation by
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the tax administrator in the manner prescribed for adjustment by the commissioner of Internal
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Revenue in 26 U.S.C. § 1(f).
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(2) For the period January 1, 2007, through December 31, 2007, and thereafter, Rhode
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Island taxable income shall be determined by deducting from federal adjusted gross income as
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defined in 26 U.S.C. § 62 as modified by the modifications in § 44-30-12 the Rhode Island
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itemized-deduction amount and the Rhode Island exemption amount as determined in this section.
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(A)
Tax imposed.
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(1) There is hereby imposed on the taxable income of married individuals filing joint
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returns and surviving spouses a tax determined in accordance with the following table:
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If taxable income is: The tax is:
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Not over $53,150 3.75% of taxable income
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Over $53,150 but not over $128,500 $1,993.13 plus 7.00% of the excess over $53,150
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Over $128,500 but not over $195,850 $7,267.63 plus 7.75% of the excess over $128,500
LC005297/SUB A - Page 3 of 18
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Over $195,850 but not over $349,700 $12,487.25 plus 9.00% of the excess over $195,850
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Over $349,700 $26,333.75 plus 9.90% of the excess over $349,700
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(2) There is hereby imposed on the taxable income of every head of household a tax
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determined in accordance with the following table:
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If taxable income is: The tax is:
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Not over $42,650 3.75% of taxable income
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Over $42,650 but not over $110,100 $1,599.38 plus 7.00% of the excess over $42,650
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Over $110,100 but not over $178,350 $6,320.88 plus 7.75% of the excess over $110,100
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Over $178,350 but not over $349,700 $11,610.25 plus 9.00% of the excess over $178,350
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Over $349,700 $27,031.75 plus 9.90% of the excess over $349,700
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(3) There is hereby imposed on the taxable income of unmarried individuals (other than
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surviving spouses and heads of households) a tax determined in accordance with the following
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table:
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If taxable income is: The tax is:
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Not over $31,850 3.75% of taxable income
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Over $31,850 but not over $77,100 $1,194.38 plus 7.00% of the excess over $31,850
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Over $77,100 but not over $160,850 $4,361.88 plus 7.75% of the excess over $77,100
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Over $160,850 but not over $349,700 $10,852.50 plus 9.00% of the excess over $160,850
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Over $349,700 $27,849.00 plus 9.90% of the excess over $349,700
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(4) There is hereby imposed on the taxable income of married individuals filing separate
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returns and bankruptcy estates a tax determined in accordance with the following table:
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If taxable income is: The tax is:
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Not over $26,575 3.75% of taxable income
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Over $26,575 but not over $64,250 $996.56 plus 7.00% of the excess over $26,575
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Over $64,250 but not over $97,925 $3,633.81 plus 7.75% of the excess over $64,250
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Over $97,925 but not over $174,850 $6,243.63 plus 9.00% of the excess over $97,925
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Over $174,850 $13,166.88 plus 9.90% of the excess over $174,850
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(5) There is hereby imposed a taxable income of an estate or trust a tax determined in
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accordance with the following table:
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If taxable income is: The tax is:
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Not over $2,150 3.75% of taxable income
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Over $2,150 but not over $5,000 $80.63 plus 7.00% of the excess over $2,150
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Over $5,000 but not over $7,650 $280.13 plus 7.75% of the excess over $5,000
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Over $7,650 but not over $10,450 $485.50 plus 9.00% of the excess over $7,650
LC005297/SUB A - Page 4 of 18
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Over $10,450 $737.50 plus 9.90% of the excess over $10,450
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(6) Adjustments for inflation.
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The dollars amount contained in paragraph (A) shall be increased by an amount equal to:
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(a) Such dollar amount contained in paragraph (A) in the year 1993, multiplied by;
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(b) The cost-of-living adjustment determined under section (J) with a base year of 1993;
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(c) The cost-of-living adjustment referred to in subparagraphs (a) and (b) used in making
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adjustments to the nine percent (9%) and nine and nine tenths percent (9.9%) dollar amounts shall
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be determined under section (J) by substituting “1994” for “1993.”
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(B)
Maximum capital gains rates.
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(1) In general.
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If a taxpayer has a net capital gain for tax years ending prior to January 1, 2010, the tax
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imposed by this section for such taxable year shall not exceed the sum of:
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(a) 2.5% of the net capital gain as reported for federal income tax purposes under section
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26 U.S.C. § 1(h)(1)(a) and 26 U.S.C. § 1(h)(1)(b).
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(b) 5% of the net capital gain as reported for federal income tax purposes under 26 U.S.C.
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§ 1(h)(1)(c).
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(c) 6.25% of the net capital gain as reported for federal income tax purposes under 26
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U.S.C. § 1(h)(1)(d).
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(d) 7% of the net capital gain as reported for federal income tax purposes under 26 U.S.C.
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§ 1(h)(1)(e).
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(2) For tax years beginning on or after January 1, 2010, the tax imposed on net capital gain
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shall be determined under subdivision 44-30-2.6(c)(2)(A).
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(C)
Itemized deductions.
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(1) In general.
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For the purposes of section (2), “itemized deductions” means the amount of federal
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itemized deductions as modified by the modifications in § 44-30-12.
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(2) Individuals who do not itemize their deductions.
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In the case of an individual who does not elect to itemize his deductions for the taxable
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year, they may elect to take a standard deduction.
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(3) Basic standard deduction.
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The Rhode Island standard deduction shall be allowed in accordance with the following
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table:
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Filing status Amount
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Single $5,350
LC005297/SUB A - Page 5 of 18
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Married filing jointly or qualifying widow(er) $8,900
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Married filing separately $4,450
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Head of Household $7,850
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(4) Additional standard deduction for the aged and blind.
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An additional standard deduction shall be allowed for individuals age sixty-five (65) or
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older or blind in the amount of $1,300 for individuals who are not married and $1,050 for
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individuals who are married.
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(5) Limitation on basic standard deduction in the case of certain dependents.
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In the case of an individual to whom a deduction under section (E) is allowable to another
10
taxpayer, the basic standard deduction applicable to such individual shall not exceed the greater of:
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(a) $850;
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(b) The sum of $300 and such individual’s earned income;
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(6) Certain individuals not eligible for standard deduction.
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In the case of:
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(a) A married individual filing a separate return where either spouse itemizes deductions;
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(b) Nonresident alien individual;
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(c) An estate or trust;
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The standard deduction shall be zero.
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(7) Adjustments for inflation.
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Each dollar amount contained in paragraphs (3), (4) and (5) shall be increased by an amount
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equal to:
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(a) Such dollar amount contained in paragraphs (3), (4) and (5) in the year 1988, multiplied
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by
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(b) The cost-of-living adjustment determined under section (J) with a base year of 1988.
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(D)
Overall limitation on itemized deductions.
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(1) General rule.
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In the case of an individual whose adjusted gross income as modified by § 44-30-12
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exceeds the applicable amount, the amount of the itemized deductions otherwise allowable for the
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taxable year shall be reduced by the lesser of:
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(a) Three percent (3%) of the excess of adjusted gross income as modified by § 44-30-12
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over the applicable amount; or
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(b) Eighty percent (80%) of the amount of the itemized deductions otherwise allowable for
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such taxable year.
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(2) Applicable amount.
LC005297/SUB A - Page 6 of 18
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(a) In general.
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For purposes of this section, the term “applicable amount” means $156,400 ($78,200 in the
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case of a separate return by a married individual)
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(b) Adjustments for inflation.
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Each dollar amount contained in paragraph (a) shall be increased by an amount equal to:
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(i) Such dollar amount contained in paragraph (a) in the year 1991, multiplied by
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(ii) The cost-of-living adjustment determined under section (J) with a base year of 1991.
8
(3) Phase-out of Limitation.
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(a) In general.
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In the case of taxable year beginning after December 31, 2005, and before January 1, 2010,
11
the reduction under section (1) shall be equal to the applicable fraction of the amount which would
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be the amount of such reduction.
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(b) Applicable fraction.
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For purposes of paragraph (a), the applicable fraction shall be determined in accordance
15
with the following table:
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For taxable years beginning in calendar year The applicable fraction is
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2006 and 2007 ⅔
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2008 and 2009 ⅓
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(E)
Exemption amount.
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(1) In general.
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Except as otherwise provided in this subsection, the term “exemption amount” means
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$3,400.
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(2) Exemption amount disallowed in case of certain dependents.
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In the case of an individual with respect to whom a deduction under this section is allowable
25
to another taxpayer for the same taxable year, the exemption amount applicable to such individual
26
for such individual's taxable year shall be zero.
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(3) Adjustments for inflation.
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The dollar amount contained in paragraph (1) shall be increased by an amount equal to:
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(a) Such dollar amount contained in paragraph (1) in the year 1989, multiplied by
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(b) The cost-of-living adjustment determined under section (J) with a base year of 1989.
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(4) Limitation.
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(a) In general.
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In the case of any taxpayer whose adjusted gross income as modified for the taxable year
34
exceeds the threshold amount shall be reduced by the applicable percentage.
LC005297/SUB A - Page 7 of 18
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(b) Applicable percentage.
2
In the case of any taxpayer whose adjusted gross income for the taxable year exceeds the
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threshold amount, the exemption amount shall be reduced by two (2) percentage points for each
4
$2,500 (or fraction thereof) by which the taxpayer’s adjusted gross income for the taxable year
5
exceeds the threshold amount. In the case of a married individual filing a separate return, the
6
preceding sentence shall be applied by substituting “$1,250” for “$2,500.” In no event shall the
7
applicable percentage exceed one hundred percent (100%).
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(c) Threshold Amount.
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For the purposes of this paragraph, the term ‘‘threshold amount’’ shall be determined with
10
the following table:
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Filing status Amount
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Single $156,400
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Married filing jointly of qualifying widow(er) $234,600
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Married filing separately $117,300
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Head of Household $195,500
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(d) Adjustments for inflation.
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Each dollar amount contained in paragraph (b) shall be increased by an amount equal to:
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(i) Such dollar amount contained in paragraph (b) in the year 1991, multiplied by
19
(ii) The cost-of-living adjustment determined under section (J) with a base year of 1991.
20
(5) Phase-out of limitation.
21
(a) In general.
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In the case of taxable years beginning after December 31, 2005, and before January 1,
23
2010, the reduction under section 4 shall be equal to the applicable fraction of the amount which
24
would be the amount of such reduction.
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(b) Applicable fraction.
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For the purposes of paragraph (a), the applicable fraction shall be determined in accordance
27
with the following table:
28
For taxable years beginning in calendar year The applicable fraction is
29
2006 and 2007 ⅔
30
2008 and 2009 ⅓
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(F)
Alternative minimum tax.
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(1) General rule. There is hereby imposed (in addition to any other tax imposed by this
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subtitle) a tax equal to the excess (if any) of:
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(a) The tentative minimum tax for the taxable year, over
LC005297/SUB A - Page 8 of 18
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(b) The regular tax for the taxable year.
2
(2) The tentative minimum tax for the taxable year is the sum of:
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(a) 6.5 percent of so much of the taxable excess as does not exceed $175,000, plus
4
(b) 7.0 percent of so much of the taxable excess above $175,000.
5
(3) The amount determined under the preceding sentence shall be reduced by the alternative
6
minimum tax foreign tax credit for the taxable year.
7
(4) Taxable excess. For the purposes of this subsection the term “taxable excess” means so
8
much of the federal alternative minimum taxable income as modified by the modifications in § 44-
9
30-12 as exceeds the exemption amount.
10
(5) In the case of a married individual filing a separate return, subparagraph (2) shall be
11
applied by substituting “$87,500” for $175,000 each place it appears.
12
(6) Exemption amount.
13
For purposes of this section "exemption amount" means:
14
Filing status Amount
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Single $39,150
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Married filing jointly or qualifying widow(er) $53,700
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Married filing separately $26,850
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Head of Household $39,150
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Estate or trust $24,650
20
(7) Treatment of unearned income of minor children
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(a) In general.
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In the case of a minor child, the exemption amount for purposes of section (6) shall not
23
exceed the sum of:
24
(i) Such child's earned income, plus
25
(ii) $6,000.
26
(8) Adjustments for inflation.
27
The dollar amount contained in paragraphs (6) and (7) shall be increased by an amount
28
equal to:
29
(a) Such dollar amount contained in paragraphs (6) and (7) in the year 2004, multiplied by
30
(b) The cost-of-living adjustment determined under section (J) with a base year of 2004.
31
(9) Phase-out.
32
(a) In general.
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The exemption amount of any taxpayer shall be reduced (but not below zero) by an amount
34
equal to twenty-five percent (25%) of the amount by which alternative minimum taxable income
LC005297/SUB A - Page 9 of 18
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of the taxpayer exceeds the threshold amount.
2
(b) Threshold amount.
3
For purposes of this paragraph, the term “threshold amount” shall be determined with the
4
following table:
5
Filing status Amount
6
Single $123,250
7
Married filing jointly or qualifying widow(er) $164,350
8
Married filing separately $82,175
9
Head of Household $123,250
10
Estate or Trust $82,150
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(c) Adjustments for inflation
12
Each dollar amount contained in paragraph (9) shall be increased by an amount equal to:
13
(i) Such dollar amount contained in paragraph (9) in the year 2004, multiplied by
14
(ii) The cost-of-living adjustment determined under section (J) with a base year of 2004.
15
(G)
Other Rhode Island taxes.
16
(1) General rule. There is hereby imposed (in addition to any other tax imposed by this
17
subtitle) a tax equal to twenty-five percent (25%) of:
18
(a) The Federal income tax on lump-sum distributions.
19
(b) The Federal income tax on parents' election to report child's interest and dividends.
20
(c) The recapture of Federal tax credits that were previously claimed on Rhode Island
21
return.
22
(H)
Tax for children under 18 with investment income.
23
(1) General rule. There is hereby imposed a tax equal to twenty-five percent (25%) of:
24
(a) The Federal tax for children under the age of 18 with investment income.
25
(I)
Averaging of farm income.
26
(1) General rule. At the election of an individual engaged in a farming business or fishing
27
business, the tax imposed in section 2 shall be equal to twenty-five percent (25%) of:
28
(a) The Federal averaging of farm income as determined in IRC section 1301 [26 U.S.C. §
29
1301].
30
(J)
Cost-of-living adjustment.
31
(1) In general.
32
The cost-of-living adjustment for any calendar year is the percentage (if any) by which:
33
(a) The CPI for the preceding calendar year exceeds
34
(b) The CPI for the base year.
LC005297/SUB A - Page 10 of 18
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(2) CPI for any calendar year.
2
For purposes of paragraph (1), the CPI for any calendar year is the average of the consumer
3
price index as of the close of the twelve (12) month period ending on August 31 of such calendar
4
year.
5
(3) Consumer price index.
6
For purposes of paragraph (2), the term “consumer price index” means the last consumer
7
price index for all urban consumers published by the department of labor. For purposes of the
8
preceding sentence, the revision of the consumer price index that is most consistent with the
9
consumer price index for calendar year 1986 shall be used.
10
(4) Rounding.
11
(a) In general.
12
If any increase determined under paragraph (1) is not a multiple of $50, such increase shall
13
be rounded to the next lowest multiple of $50.
14
(b) In the case of a married individual filing a separate return, subparagraph (a) shall be
15
applied by substituting “$25” for $50 each place it appears.
16
(K)
Credits against tax.
For tax years beginning on or after January 1, 2001, a taxpayer
17
entitled to any of the following federal credits enacted prior to January 1, 1996, shall be entitled to
18
a credit against the Rhode Island tax imposed under this section:
19
(1) [Deleted by P.L. 2007, ch. 73, art. 7, § 5.]
20
(2) Child and dependent care credit;
21
(3) General business credits;
22
(4) Credit for elderly or the disabled;
23
(5) Credit for prior year minimum tax;
24
(6) Mortgage interest credit;
25
(7) Empowerment zone employment credit;
26
(8) Qualified electric vehicle credit.
27
(L)
Credit against tax for adoption.
For tax years beginning on or after January 1, 2006,
28
a taxpayer entitled to the federal adoption credit shall be entitled to a credit against the Rhode Island
29
tax imposed under this section if the adopted child was under the care, custody, or supervision of
30
the Rhode Island department of children, youth and families prior to the adoption.
31
(M) The credit shall be twenty-five percent (25%) of the aforementioned federal credits
32
provided there shall be no deduction based on any federal credits enacted after January 1, 1996,
33
including the rate reduction credit provided by the federal Economic Growth and Tax
34
Reconciliation Act of 2001 (EGTRRA). In no event shall the tax imposed under this section be
LC005297/SUB A - Page 11 of 18
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reduced to less than zero. A taxpayer required to recapture any of the above credits for federal tax
2
purposes shall determine the Rhode Island amount to be recaptured in the same manner as
3
prescribed in this subsection.
4
(N)
Rhode Island earned-income credit.
5
(1) In general.
6
For tax years beginning before January 1, 2015, a taxpayer entitled to a federal earned-
7
income credit shall be allowed a Rhode Island earned-income credit equal to twenty-five percent
8
(25%) of the federal earned-income credit. Such credit shall not exceed the amount of the Rhode
9
Island income tax.
10
For tax years beginning on or after January 1, 2015, and before January 1, 2016, a taxpayer
11
entitled to a federal earned-income credit shall be allowed a Rhode Island earned-income credit
12
equal to ten percent (10%) of the federal earned-income credit. Such credit shall not exceed the
13
amount of the Rhode Island income tax.
14
For tax years beginning on or after January 1, 2016, a taxpayer entitled to a federal earned-
15
income credit shall be allowed a Rhode Island earned-income credit equal to twelve and one-half
16
percent (12.5%) of the federal earned-income credit. Such credit shall not exceed the amount of the
17
Rhode Island income tax.
18
For tax years beginning on or after January 1, 2017, a taxpayer entitled to a federal earned-
19
income credit shall be allowed a Rhode Island earned-income credit equal to fifteen percent (15%)
20
of the federal earned-income credit. Such credit shall not exceed the amount of the Rhode Island
21
income tax.
22
For tax years beginning on or after January 1, 2024, a taxpayer entitled to a federal earned-
23
income credit shall be allowed a Rhode Island earned-income credit equal to sixteen percent (16%)
24
of the federal earned-income credit. Such credit shall not exceed the amount of the Rhode Island
25
income tax.
26
(2) Refundable portion.
27
In the event the Rhode Island earned-income credit allowed under paragraph (N)(1) of this
28
section exceeds the amount of Rhode Island income tax, a refundable earned-income credit shall
29
be allowed as follows.
30
(i) For tax years beginning before January 1, 2015, for purposes of paragraph (2) refundable
31
earned-income credit means fifteen percent (15%) of the amount by which the Rhode Island earned-
32
income credit exceeds the Rhode Island income tax.
33
(ii) For tax years beginning on or after January 1, 2015, for purposes of paragraph (2)
34
refundable earned-income credit means one hundred percent (100%) of the amount by which the
LC005297/SUB A - Page 12 of 18
1
Rhode Island earned-income credit exceeds the Rhode Island income tax.
2
(O) The tax administrator shall recalculate and submit necessary revisions to paragraphs
3
(A) through (J) to the general assembly no later than February 1, 2010, and every three (3) years
4
thereafter for inclusion in the statute.
5
(3) For the period January 1, 2011, through December 31, 2011, and thereafter, “Rhode
6
Island taxable income” means federal adjusted gross income as determined under the Internal
7
Revenue Code, 26 U.S.C. § 1 et seq., and as modified for Rhode Island purposes pursuant to § 44-
8
30-12 less the amount of Rhode Island Basic Standard Deduction allowed pursuant to subparagraph
9
44-30-2.6(c)(3)(B), and less the amount of personal exemption allowed pursuant to subparagraph
10
44-30-2.6(c)(3)(C).
11
(A)
Tax imposed.
12
(I) There is hereby imposed on the taxable income of married individuals filing joint
13
returns, qualifying widow(er), every head of household, unmarried individuals, married individuals
14
filing separate returns and bankruptcy estates, a tax determined in accordance with the following
15
table:
16
(1)
17
RI Taxable Income RI Income Tax
18
Over But not over Pay + % on Excess on the amount over
19
$ 0 - $ 55,000 $ 0 + 3.75% $ 0
20
55,000 - 125,000 2,063 + 4.75% 55,000
21
125,000 - 5,388 + 5.99% 125,000
22
(2) High-income surtax. (i) For tax years beginning on or after January 1, 2027, until the
23
tax year beginning January 1, 2028, there is hereby imposed on the taxable income of married
24
individuals filing joint returns, qualifying widow(er), every head of household, unmarried
25
individuals, married individuals filing separate returns and bankruptcy estates, a tax at one percent
26
(1%) of Rhode Island taxable income over one million dollars ($1,000,000).
27
(ii) For tax years beginning on or after January 1, 2028, until the tax year beginning January
28
1, 2029, there is hereby imposed on the taxable income of married individuals filing joint returns,
29
qualifying widow(er), every head of household, unmarried individuals, married individuals filing
30
separate returns and bankruptcy estates, a tax at two percent (2%) of Rhode Island taxable income
31
over one million dollars ($1,000,000), as adjusted for inflation.
32
(iii) For tax years beginning on or after January 1, 2029, there is hereby imposed on the
33
taxable income of married individuals filing joint returns, qualifying widow(er), every head of
34
household, unmarried individuals, married individuals filing separate returns and bankruptcy
LC005297/SUB A - Page 13 of 18
1
estates, a tax at three percent (3%) of Rhode Island taxable income over one million dollars
2
($1,000,000), as adjusted for inflation.
3
(3)
Highest Rhode Island withholding tax rate provided for individuals.
For the
4
purposes of this chapter, for tax years beginning on or after January 1, 2027, any reference to the
5
highest Rhode Island withholding tax rate provided for individuals shall be the sum of the highest
6
marginal tax rate in § 44-30-2.6(c)(3)(A)(I)(1) and the high-income surtax in § 44-30-
7
2.6(c)(3)(A)(I)(2).
8
(4)
Personal income tax.
For the purposes of this title, any reference to personal income
9
tax for individuals shall include the tax imposed in § 44-30-2.6(c)(3)(A)(I)(1) and the high-income
10
surtax in § 44-30-2.6(c)(3)(A)(I)(2)
11
(II) There is hereby imposed on the taxable income of an estate or trust a tax determined in
12
accordance with the following table:
13
(1)
14
RI Taxable Income RI Income Tax
15
Over But not over Pay + % on Excess on the amount over
16
$ 0 - $ 2,230 $ 0 + 3.75% $ 0
17
2,230 - 7,022 84 + 4.75% 2,230
18
7,022 - 312 + 5.99% 7,022
19
(2) High-income surtax. (i) For tax years beginning on or after January 1, 2027, until the
20
tax year beginning January 1, 2028, there is hereby imposed on the taxable income of an estate or
21
trust, a tax at one percent (1%) of Rhode Island taxable income over thirty-six thousand four
22
hundred twenty-seven dollars ($36,427).
23
(ii) For tax years beginning on or after January 1, 2028, until the tax year beginning January
24
1, 2029, there is hereby imposed on the taxable income of an estate or trust, a tax at two percent
25
(2%) of Rhode Island taxable income over thirty-six thousand four hundred twenty-seven dollars
26
($36,427), as adjusted for inflation.
27
(iii) For tax years beginning on or after January 1, 2029, there is hereby imposed on the
28
taxable income of an estate or trust, a tax at three percent (3%) of Rhode Island taxable income
29
over thirty-six thousand four hundred twenty-seven dollars ($36,427), as adjusted for inflation.
30
(3)
Personal income tax.
For the purposes of this title, any reference to personal income
31
tax for an estate or trust shall include the tax imposed in § 44-30-2.6(c)(3)(A)(II)(1) and the high-
32
income surtax in § 44-30-2.6(c)(3)(A)(II)(2).
33
(B)
Deductions:
34
(I) Rhode Island Basic Standard Deduction.
LC005297/SUB A - Page 14 of 18
1
Only the Rhode Island standard deduction shall be allowed in accordance with the
2
following table:
3
Filing status: Amount
4
Single $7,500
5
Married filing jointly or qualifying widow(er) $15,000
6
Married filing separately $7,500
7
Head of Household $11,250
8
(II) Nonresident alien individuals, estates and trusts are not eligible for standard
9
deductions.
10
(III) In the case of any taxpayer whose adjusted gross income, as modified for Rhode Island
11
purposes pursuant to § 44-30-12, for the taxable year exceeds one hundred seventy-five thousand
12
dollars ($175,000), the standard deduction amount shall be reduced by the applicable percentage.
13
The term “applicable percentage” means twenty (20) percentage points for each five thousand
14
dollars ($5,000) (or fraction thereof) by which the taxpayer’s adjusted gross income for the taxable
15
year exceeds one hundred seventy-five thousand dollars ($175,000).
16
(C)
Exemption Amount:
17
(I) The term “exemption amount” means three thousand five hundred dollars ($3,500)
18
multiplied by the number of exemptions allowed for the taxable year for federal income tax
19
purposes. For tax years beginning on or after 2018, the term “exemption amount” means the same
20
as it does in 26 U.S.C. § 151 and 26 U.S.C. § 152 just prior to the enactment of the Tax Cuts and
21
Jobs Act (Pub. L. No. 115-97) on December 22, 2017.
22
(II) Exemption amount disallowed in case of certain dependents. In the case of an
23
individual with respect to whom a deduction under this section is allowable to another taxpayer for
24
the same taxable year, the exemption amount applicable to such individual for such individual’s
25
taxable year shall be zero.
26
(III) Identifying information required.
27
(1) Except as provided in § 44-30-2.6(c)(3)(C)(II) of this section, no exemption shall be
28
allowed under this section with respect to any individual unless the Taxpayer Identification Number
29
of such individual is included on the federal return claiming the exemption for the same tax filing
30
period.
31
(2) Notwithstanding the provisions of § 44-30-2.6(c)(3)(C)(I) of this section, in the event
32
that the Taxpayer Identification Number for each individual is not required to be included on the
33
federal tax return for the purposes of claiming a personal exemption(s), then the Taxpayer
34
Identification Number must be provided on the Rhode Island tax return for the purpose of claiming
LC005297/SUB A - Page 15 of 18
1
said exemption(s).
2
(D) In the case of any taxpayer whose adjusted gross income, as modified for Rhode Island
3
purposes pursuant to § 44-30-12, for the taxable year exceeds one hundred seventy-five thousand
4
dollars ($175,000), the exemption amount shall be reduced by the applicable percentage. The term
5
“applicable percentage” means twenty (20) percentage points for each five thousand dollars
6
($5,000) (or fraction thereof) by which the taxpayer’s adjusted gross income for the taxable year
7
exceeds one hundred seventy-five thousand dollars ($175,000).
8
(E)
Adjustment for inflation.
The dollar amount contained in subparagraphs 44-30-
9
2.6(c)(3)(A), 44-30-2.6(c)(3)(B) and 44-30-2.6(c)(3)(C) shall be increased annually by an amount
10
equal to:
11
(I) Such dollar amount contained in subparagraphs 44-30-2.6(c)(3)(A), 44-30-2.6(c)(3)(B)
12
and 44-30-2.6(c)(3)(C) adjusted for inflation using a base tax year of 2000, multiplied by;
13
(II) The cost-of-living adjustment with a base year of 2000.
14
(III)
For tax years beginning on or after January 1, 2027, for §§ 44-30-2.6(c)(3)(A)(I)(2)
15
and 44-30-2.6(c)(3)(A)(II)(2), the base tax year and the base year shall be 2026.
16
(IV)
For the purposes of this section, the cost-of-living adjustment for any calendar year is
17
the percentage (if any) by which the consumer price index for the preceding calendar year exceeds
18
the consumer price index for the base year. The consumer price index for any calendar year is the
19
average of the consumer price index as of the close of the twelve-month (12) period ending on
20
August 31, of such calendar year.
21
(IV)
(V)
For the purpose of this section the term “consumer price index” means the last
22
consumer price index for all urban consumers published by the department of labor. For the purpose
23
of this section the revision of the consumer price index that is most consistent with the consumer
24
price index for calendar year 1986 shall be used.
25
(V)
(VI)
If any increase determined under this section is not a multiple of fifty dollars
26
($50.00), such increase shall be rounded to the next lower multiple of fifty dollars ($50.00). In the
27
case of a married individual filing separate return, if any increase determined under this section is
28
not a multiple of twenty-five dollars ($25.00), such increase shall be rounded to the next lower
29
multiple of twenty-five dollars ($25.00).
30
(F)
Credits against tax.
31
(I) Notwithstanding any other provisions of Rhode Island Law, for tax years beginning on
32
or after January 1, 2011, the only credits allowed against a tax imposed under this chapter shall be
33
as follows:
34
(a) Rhode Island earned-income credit: Credit shall be allowed for earned-income credit
LC005297/SUB A - Page 16 of 18
1
pursuant to subparagraph 44-30-2.6(c)(2)(N).
2
(b) Property Tax Relief Credit: Credit shall be allowed for property tax relief as provided
3
in § 44-33-1 et seq.
4
(c) Lead Paint Credit: Credit shall be allowed for residential lead abatement income tax
5
credit as provided in § 44-30.3-1 et seq.
6
(d) Credit for income taxes of other states. Credit shall be allowed for income tax paid to
7
other states pursuant to § 44-30-74.
8
(e) Historic Structures Tax Credit: Credit shall be allowed for historic structures tax credit
9
as provided in § 44-33.2-1 et seq.
10
(f) Motion Picture Productions Tax Credit: Credit shall be allowed for motion picture
11
production tax credit as provided in § 44-31.2-1 et seq.
12
(g) Child and Dependent Care: Credit shall be allowed for twenty-five percent (25%) of
13
the federal child and dependent care credit allowable for the taxable year for federal purposes;
14
provided, however, such credit shall not exceed the Rhode Island tax liability.
15
(h) Tax credits for contributions to Scholarship Organizations: Credit shall be allowed for
16
contributions to scholarship organizations as provided in chapter 62 of title 44.
17
(i) Credit for tax withheld. Wages upon which tax is required to be withheld shall be taxable
18
as if no withholding were required, but any amount of Rhode Island personal income tax actually
19
deducted and withheld in any calendar year shall be deemed to have been paid to the tax
20
administrator on behalf of the person from whom withheld, and the person shall be credited with
21
having paid that amount of tax for the taxable year beginning in that calendar year. For a taxable
22
year of less than twelve (12) months, the credit shall be made under regulations of the tax
23
administrator.
24
(j) Stay Invested in RI Wavemaker Fellowship: Credit shall be allowed for stay invested in
25
RI wavemaker fellowship program as provided in § 42-64.26-1 et seq.
26
(k) Rebuild Rhode Island: Credit shall be allowed for rebuild RI tax credit as provided in
27
§ 42-64.20-1 et seq.
28
(l) Rhode Island Qualified Jobs Incentive Program: Credit shall be allowed for Rhode
29
Island new qualified jobs incentive program credit as provided in § 44-48.3-1 et seq.
30
(m) Historic homeownership assistance act: Effective for tax year 2017 and thereafter,
31
unused carryforward for such credit previously issued shall be allowed for the historic
32
homeownership assistance act as provided in § 44-33.1-4. This allowance is for credits already
33
issued pursuant to § 44-33.1-4 and shall not be construed to authorize the issuance of new credits
34
under the historic homeownership assistance act.
LC005297/SUB A - Page 17 of 18
1
(n) Child tax credit: Effective for tax years beginning on or after January 1, 2027, credit
2
shall be allowed for the child tax credit as provided in § 44-30-104.
3
(2) Except as provided in section 1 above, no other state and federal tax credit shall be
4
available to the taxpayers in computing tax liability under this chapter.
5
SECTION 3. This act shall take effect upon passage.
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LC005297/SUB A
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LC005297/SUB A - Page 18 of 18
EXPLANATION
BY THE LEGISLATIVE COUNCIL
OF
A N A C T
RELATING TO TAXATION -- PERSONAL INCOME TAX
***
1
This act would establish a child tax credit in the amount of three hundred thirty dollars
2
($330) for eligible taxpayers adjusted for inflation annually commencing January 1, 2027.
3
This act would take effect upon passage.
========
LC005297/SUB A
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LC005297/SUB A - Page 19 of 18