Rhode Island House Bill H6010

Rhode Island 2023 Regular Session

• Introduced: 3/1/23
• Refer: 3/1/23

Caption

Personal Income Tax

Impact

The proposed changes in H6010 may significantly impact state tax collections by allowing an increase in deductions. This could benefit many retirees or elderly individuals on fixed incomes who depend on their pensions. Such changes are expected to improve the overall economic situation for these taxpayers by enhancing their disposable income and possibly encouraging consumer spending. However, there might be concerns about how these modifications could affect the state’s revenue in the long run, as tax reductions may lead to a narrower tax base.

Summary

House Bill H6010 seeks to amend the existing regulations concerning personal income tax in Rhode Island. The primary focus of the bill is to adjust the modifications made to an individual's federal adjusted gross income for state tax purposes. This amendment includes a substantial increase in the income modification for taxable pension and annuity income, specifically allowing a modification of up to $20,000 beginning in the tax year 2023 for qualifying individuals. This change aims to provide significant tax relief to retirees by reducing their taxable income based on their pension benefits.

Contention

Within the discussions surrounding H6010, points of contention may arise regarding the fairness of these tax modifications. While proponents believe that increasing pension tax modifications is a necessary step to support the aging population in Rhode Island, opponents might argue that such measures disproportionately benefit higher-income retirees at the expense of state funding for public services. Furthermore, the bill also introduces various modifications related to social security income and tuition savings, which may require additional scrutiny regarding their implications on broader tax law and equity in taxation.