Amends modifications to income tax for residents to now include an exemption for a foreign service officer's pension.
Impact
The enactment of S2067 would result in a notable alteration in how Rhode Island calculates taxable income for certain residents, thereby affecting state revenue. It specifically targets a demographic of public servants, enhancing the appeal of Rhode Island as a place of residence for foreign service officers, who may be deterred by state taxation on their pensions. By excluding these pension incomes, the bill not only provides financial relief but also promotes retention and attraction of skilled workers in government sectors.
Summary
Bill S2067, introduced by Senator V. Susan Sosnowski, aims to amend Rhode Island's personal income tax laws by providing an exemption for pension benefits received by foreign service officers. The bill proposes that these pensions, which are typically included in the federal adjusted gross income, be subtracted from the state tax liability starting from tax years beginning on January 1, 2025. This change reflects a growing recognition of service individuals and their unique circumstances after serving abroad, potentially aiding in their financial stability during retirement.
Contention
Despite its potential benefits, the bill may encounter opposition regarding fiscal implications. Critics could argue that the state cannot afford to lose further tax revenue amidst budgetary constraints. Furthermore, there may be concerns about fairness, as this tax exemption solely applies to foreign service officers, which could lead to viewpoints that question the equity of differentiating between public servants. The legislative debate may focus on evaluating the balance between supporting public service members and maintaining a robust state tax system.
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.
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.
Gradually phases in modifications to federal adjusted gross income over a four (4) year period for social security income, from twenty-five percent (25%) up to one hundred percent (100%), beginning on or after January 1, 2026.
Phases in modifications to federal adjusted gross income over a four (4) year period for social security income, from twenty percent (20%) up to eighty percent (80%), beginning on or after January 1, 2026.
Phases in modifications to federal adjusted gross income over a 4 year period for social security income, from 25% up to 100%, beginning on or after January 1, 2025.