Allows a modification to federal adjusted gross income for all social security income for tax years beginning on or after January 1, 2025.
Impact
The immediate impact of S2061 is expected to be significant for retired individuals who often rely heavily on social security income. By exempting this type of income from state taxes, the bill aims to enhance the financial stability of this demographic, which typically faces higher living costs. If enacted, this legislation will modify how personal income tax is calculated in Rhode Island and could lead to an increase in disposable income for eligible residents.
Summary
Bill S2061 proposes an amendment to Rhode Island's taxation laws by allowing residents to modify their federal adjusted gross income to exclude all social security income for tax years commencing on or after January 1, 2025. This legislative change is aimed at providing greater financial relief to individuals receiving social security benefits, thereby potentially alleviating the tax burden on elderly residents and those relying on these benefits as primary sources of income.
Contention
While the bill garners support for its potential benefits to seniors and those on fixed incomes, it may also face opposition regarding its implications for state revenue. Critics could argue that exempting social security benefits from taxation could strain the state’s budget, potentially affecting funding for public services. The discussions surrounding the bill in committee may reveal differing perspectives on balancing fiscal responsibility with the needs of vulnerable populations, indicating an area of contention among legislators.
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.
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.
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.