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.
Impact
The implications of S2158 are particularly notable for elderly residents and those dependent on Social Security benefits for their livelihood. By exempting an increasing portion of Social Security income from taxation, the bill seeks to enhance financial stability for this demographic. Additionally, it is expected to simplify state tax calculations for many individuals, allowing them to retain a larger portion of their income. The legislation could also serve as an incentive for retirees to continue living in the state, thereby promoting economic stability within the community.
Summary
Bill S2158 proposes a series of modifications to the personal income tax structure in Rhode Island, particularly focusing on the treatment of Social Security income. The bill aims to incrementally phase in deductions from federal adjusted gross income for Social Security income over a four-year period, beginning with 25% in 2025 and reaching 100% by 2028. This gradual adjustment is designed to provide tax relief to residents reliant on Social Security, effectively reducing their taxable income and potentially lowering their tax burden significantly as the full exemption is realized.
Contention
While supporters of the bill argue that it is a necessary measure to alleviate the financial pressures faced by senior citizens, opponents may raise concerns regarding the potential impact on state revenue. As the state prepares to forego a significant portion of tax revenues from Social Security income, detractors could argue that this could necessitate cuts in other areas of public service or lead to increased taxes elsewhere. Thus, the bill positions itself at the intersection of providing relief to residents while maintaining necessary funding for state operations.
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.