Amends modifications to income tax for residents to now include an exemption for a foreign service officer's pension.
Impact
The passage of S0106 is expected to have a significant impact on state tax laws by providing a financial incentive for foreign service officers who retire in Rhode Island. The exemption can encourage this specific group of professionals to settle in the state post-retirement, possibly leading to increased community engagement and contributions from this demographic. Additionally, the bill underlines Rhode Island's commitment to supporting public servants and could be seen as a progressive step in enhancing state tax equity.
Summary
Bill S0106 aims to amend the current personal income tax regulations in Rhode Island by including a specific exemption for pension benefits received by foreign service officers. This legislative change will take effect from January 1, 2026, allowing eligible individuals to subtract their foreign service pensions from their federal adjusted gross income when calculating their state tax liabilities. The bill is intended to align state taxation policies with federal exemptions, enhancing the financial benefits for those serving in these roles.
Contention
While the bill generally appears to have favorable intentions, it may lead to discussions regarding the fairness of tax exemptions for select groups of retirees. Some critics might argue that this specific exemption for foreign service officers sets a precedent for unequal treatment compared to other public service professionals, which could spark calls for broader tax reforms that provide equitable treatment for all retirees. Additionally, the state will have to consider the fiscal implications of this exemption on its overall tax revenue.
Additional_notes
The potential effect on overall state revenues must be assessed as the bill moves through the legislative process. Discussions among stakeholders may focus on whether this targeted exemption creates sustainable benefits for the broader economic fabric of Rhode Island.
Allows a modification up to $50,000 of taxable pension and/or annuity income includible in federal adjusted gross income for tax years beginning on or after January 1, 2025.
Allows a modification for all taxable pension and/or annuity income includible in federal adjusted gross income for tax years beginning on or after January 1, 2025.
Increases the federal adjusted gross income threshold for modification for taxable social security income. Amends references to federal adjusted gross income as pertains to modification of taxable retirement income from certain pension plans or annuities.
Allows a modification to federal adjusted gross income of fifty thousand dollars ($50,000) of taxable pension and/or annuity income for tax years beginning on or after January 1, 2025.
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 4 year period for social security income, from 25% up to 100%, beginning on or after January 1, 2025.
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.
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.