Rhode Island House Bill H5624

Rhode Island 2023 Regular Session

• Introduced: 2/15/23
• Refer: 2/15/23

Caption

Personal Income Tax

Impact

The bill's implementation could significantly impact state tax revenues by decreasing the taxable income reported by certain individuals. This potential loss in state revenue is counterbalanced by predicted increases in disposable income for retirees, possibly stimulating local economies. The modifications will specifically affect how pension and annuity income are treated during state income tax calculations, allowing certain categories of individuals, especially seniors and veterans, to retain a larger share of their retirement benefits.

Summary

House Bill 5624, introduced during the January session of 2023, seeks to amend the Rhode Island General Laws regarding personal income tax. The central feature of the bill is the proposed modification of up to fifty thousand dollars ($50,000) for residents regarding taxable pension and/or annuity income included in the federal adjusted gross income for tax years beginning on or after January 1, 2024. This change aims to provide considerable financial relief to retired individuals and military service members who rely on pensions and annuities for their livelihoods.

Contention

Notably, discussions around H5624 may elicit divergent opinions among lawmakers and constituents. Supporters argue that the bill alleviates the tax burden on retirees, thereby acknowledging their contributions to the workforce and society. However, opponents may contend that substantial modifications to tax policy without accompanying revenue increases could harm state funding for public services. Additionally, there may be concerns regarding the fairness in tax policy, with debates about whether such modifications disproportionately benefit a specific demographic group over others.