The bill's passing would significantly affect how military retirement income is taxed in Rhode Island. By exempting this income from state taxation, it aims to alleviate financial pressures on veterans and encourage them to reside in the state post-retirement. Proponents argue that such a measure would make the state more attractive to military families and retirees, supporting their integration and participation in local economies. Furthermore, it aligns with the national trend of states offering tax relief for veterans' income.
Summary
S2066 proposes amendments to the Rhode Island General Laws regarding personal income tax, specifically targeting modifications to federal adjusted gross income for military retirement income. Effective from January 1, 2023, this bill seeks to allow residents who receive military pension income to subtract this income from their federal adjusted gross income when calculating state taxes. The goal is to provide fiscal relief to veterans and their families, ensuring that military service is recognized and rewarded in the state’s tax code.
Contention
While the bill received notable support for its intentions to benefit veterans, there are concerns about its potential fiscal impact on state revenues. Opponents may argue that exempting military pensions could lead to a decrease in tax income, thus straining state budgets. During discussions, advocates for fiscal conservatism may raise alarms about the implications this could have for funding essential state services. However, supporters emphasize the moral obligation to support those who have served in the military and the overall socio-economic benefits of retaining veteran populations in Rhode Island.
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.