Rhode Island 2023 Regular Session

Rhode Island Senate Bill S0019 Compare Versions

Only one version of the bill is available at this time.

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5	5	2023 -- S 0019
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7	7	LC000358
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9	9	S T A T E O F R H O D E I S L A N D
10	10	IN GENERAL ASSEMBLY
11	11	JANUARY SESSION, A.D. 2023
12	12	____________
13	13
14	14	A N A C T
15	15	RELATING TO TAXATION -- PERSONAL INCOME TAX
16	16	Introduced By: Senator Frank A. Ciccone
17	17	Date Introduced: January 18, 2023
18	18	Referred To: Senate Finance
19	19
20	20
21	21	It is enacted by the General Assembly as follows:
22	22	SECTION 1. Section 44-30-2.6 of the General Laws in Chapter 44-30 entitled "Personal 1
23	23	Income Tax" is hereby amended to read as follows: 2
24	24	44-30-2.6. Rhode Island taxable income — Rate of tax. 3
25	25	(a) “Rhode Island taxable income” means federal taxable income as determined under the 4
26	26	Internal Revenue Code, 26 U.S.C. § 1 et seq., not including the increase in the basic, standard-5
27	27	deduction amount for married couples filing joint returns as provided in the Jobs and Growth Tax 6
28	28	Relief Reconciliation Act of 2003 and the Economic Growth and Tax Relief Reconciliation Act of 7
29	29	2001 (EGTRRA), and as modified by the modifications in § 44-30-12. 8
30	30	(b) Notwithstanding the provisions of §§ 44-30-1 and 44-30-2, for tax years beginning on 9
31	31	or after January 1, 2001, a Rhode Island personal income tax is imposed upon the Rhode Island 10
32	32	taxable income of residents and nonresidents, including estates and trusts, at the rate of twenty-five 11
33	33	and one-half percent (25.5%) for tax year 2001, and twenty-five percent (25%) for tax year 2002 12
34	34	and thereafter of the federal income tax rates, including capital gains rates and any other special 13
35	35	rates for other types of income, except as provided in § 44-30-2.7, which were in effect immediately 14
36	36	prior to enactment of the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA); 15
37	37	provided, rate schedules shall be adjusted for inflation by the tax administrator beginning in taxable 16
38	38	year 2002 and thereafter in the manner prescribed for adjustment by the commissioner of Internal 17
39	39	Revenue in 26 U.S.C. § 1(f). However, for tax years beginning on or after January 1, 2006, a 18
40	40	taxpayer may elect to use the alternative flat tax rate provided in § 44-30-2.10 to calculate his or 19
41	41
42	42
43	43	LC000358 - Page 2 of 16
44	44	her personal income tax liability. 1
45	45	(c) For tax years beginning on or after January 1, 2001, if a taxpayer has an alternative 2
46	46	minimum tax for federal tax purposes, the taxpayer shall determine if he or she has a Rhode Island 3
47	47	alternative minimum tax. The Rhode Island alternative minimum tax shall be computed by 4
48	48	multiplying the federal tentative minimum tax without allowing for the increased exemptions under 5
49	49	the Jobs and Growth Tax Relief Reconciliation Act of 2003 (as redetermined on federal form 6251 6
50	50	Alternative Minimum Tax-Individuals) by twenty-five and one-half percent (25.5%) for tax year 7
51	51	2001, and twenty-five percent (25%) for tax year 2002 and thereafter, and comparing the product 8
52	52	to the Rhode Island tax as computed otherwise under this section. The excess shall be the taxpayer’s 9
53	53	Rhode Island alternative minimum tax. 10
54	54	(1) For tax years beginning on or after January 1, 2005, and thereafter, the exemption 11
55	55	amount for alternative minimum tax, for Rhode Island purposes, shall be adjusted for inflation by 12
56	56	the tax administrator in the manner prescribed for adjustment by the commissioner of Internal 13
57	57	Revenue in 26 U.S.C. § 1(f). 14
58	58	(2) For the period January 1, 2007, through December 31, 2007, and thereafter, Rhode 15
59	59	Island taxable income shall be determined by deducting from federal adjusted gross income as 16
60	60	defined in 26 U.S.C. § 62 as modified by the modifications in § 44-30-12 the Rhode Island 17
61	61	itemized-deduction amount and the Rhode Island exemption amount as determined in this section. 18
62	62	(A) Tax imposed. 19
63	63	(1) There is hereby imposed on the taxable income of married individuals filing joint 20
64	64	returns and surviving spouses a tax determined in accordance with the following table: 21
65	65	If taxable income is: The tax is: 22
66	66	Not over $53,150 3.75% of taxable income 23
67	67	Over $53,150 but not over $128,500 $1,993.13 plus 7.00% of the excess over $53,150 24
68	68	Over $128,500 but not over $195,850 $7,267.63 plus 7.75% of the excess over $128,500 25
69	69	Over $195,850 but not over $349,700 $12,487.25 plus 9.00% of the excess over $195,850 26
70	70	Over $349,700 but not over $500,000 $26,333.75 plus 9.90% of the excess over $349,700 27
71	71	Over $500,000 $41,213.45 plus 11.90% of the excess over $500,000 28
72	72	(2) There is hereby imposed on the taxable income of every head of household a tax 29
73	73	determined in accordance with the following table: 30
74	74	If taxable income is: The tax is: 31
75	75	Not over $42,650 3.75% of taxable income 32
76	76	Over $42,650 but not over $110,100 $1,599.38 plus 7.00% of the excess over $42,650 33
77	77	Over $110,100 but not over $178,350 $6,320.88 plus 7.75% of the excess over $110,100 34
78	78
79	79
80	80	LC000358 - Page 3 of 16
81	81	Over $178,350 but not over $349,700 $11,610.25 plus 9.00% of the excess over $178,350 1
82	82	Over $349,700 but not over $500,000 $27,031.75 plus 9.90% of the excess over $349,700 2
83	83	Over $500,000 $41,911.45 plus 11.90% of the excess over $500,000 3
84	84	(3) There is hereby imposed on the taxable income of unmarried individuals (other than 4
85	85	surviving spouses and heads of households) a tax determined in accordance with the following 5
86	86	table: 6
87	87	If taxable income is: The tax is: 7
88	88	Not over $31,850 3.75% of taxable income 8
89	89	Over $31,850 but not over $77,100 $1,194.38 plus 7.00% of the excess over $31,850 9
90	90	Over $77,100 but not over $160,850 $4,361.88 plus 7.75% of the excess over $77,100 10
91	91	Over $160,850 but not over $349,700 $10,852.50 plus 9.00% of the excess over $160,850 11
92	92	Over $349,700 but not over $500,000 $27,849.00 plus 9.90% of the excess over $349,700 12
93	93	Over $500,000 $42,728.70 plus 11.90% of the excess over $500,000 13
94	94	(4) There is hereby imposed on the taxable income of married individuals filing separate 14
95	95	returns and bankruptcy estates a tax deter- mined in accordance with the following table: 15
96	96	If taxable income is: The tax is: 16
97	97	Not over $26,575 3.75% of taxable income 17
98	98	Over $26,575 but not over $64,250 $996.56 plus 7.00% of the excess over $26,575 18
99	99	Over $64,250 but not over $97,925 $3,633.81 plus 7.75% of the excess over $64,250 19
100	100	Over $97,925 but not over $174,850 $6,243.63 plus 9.00% of the excess over $97,925 20
101	101	Over $174,850 but not over $500,000 $13,166.88 plus 9.90% of the excess over $174,850 21
102	102	Over $500,000 $45,356.73 plus 11.90% of the excess over $500,000 22
103	103	(5) There is hereby imposed a taxable income of an estate or trust a tax determined in 23
104	104	accordance with the following table: 24
105	105	If taxable income is: The tax is: 25
106	106	Not over $2,150 3.75% of taxable income 26
107	107	Over $2,150 but not over $5,000 $80.63 plus 7.00% of the excess over $2,150 27
108	108	Over $5,000 but not over $7,650 $280.13 plus 7.75% of the excess over $5,000 28
109	109	Over $7,650 but not over $10,450 $485.50 plus 9.00% of the excess over $7,650 29
110	110	Over $10,450 $737.50 plus 9.90% of the excess over $10,450 30
111	111	(6) Adjustments for inflation. 31
112	112	The dollars amount contained in paragraph (A) shall be increased by an amount equal to: 32
113	113	(a) Such dollar amount contained in paragraph (A) in the year 1993, multiplied by; 33
114	114	(b) The cost-of-living adjustment determined under section (J) with a base year of 1993; 34
115	115
116	116
117	117	LC000358 - Page 4 of 16
118	118	(c) The cost-of-living adjustment referred to in subparagraphs (a) and (b) used in making 1
119	119	adjustments to the nine percent (9%) and nine and nine tenths percent (9.9%) dollar amounts shall 2
120	120	be determined under section (J) by substituting “1994” for “1993.” 3
121	121	(B) Maximum capital gains rates. 4
122	122	(1) In general. 5
123	123	If a taxpayer has a net capital gain for tax years ending prior to January 1, 2010, the tax 6
124	124	imposed by this section for such taxable year shall not exceed the sum of: 7
125	125	(a) 2.5% of the net capital gain as reported for federal income tax purposes under section 8
126	126	26 U.S.C. § 1(h)(1)(a) and 26 U.S.C. § 1(h)(1)(b). 9
127	127	(b) 5% of the net capital gain as reported for federal income tax purposes under 26 U.S.C. 10
128	128	§ 1(h)(1)(c). 11
129	129	(c) 6.25% of the net capital gain as reported for federal income tax purposes under 26 12
130	130	U.S.C. § 1(h)(1)(d). 13
131	131	(d) 7% of the net capital gain as reported for federal income tax purposes under 26 U.S.C. 14
132	132	§ 1(h)(1)(e). 15
133	133	(2) For tax years beginning on or after January 1, 2010, the tax imposed on net capital gain 16
134	134	shall be determined under subdivision 44-30-2.6(c)(2)(A). 17
135	135	(C) Itemized deductions. 18
136	136	(1) In general. 19
137	137	For the purposes of section (2), “itemized deductions” means the amount of federal 20
138	138	itemized deductions as modified by the modifications in § 44-30-12. 21
139	139	(2) Individuals who do not itemize their deductions. 22
140	140	In the case of an individual who does not elect to itemize his deductions for the taxable 23
141	141	year, they may elect to take a standard deduction. 24
142	142	(3) Basic standard deduction. 25
143	143	The Rhode Island standard deduction shall be allowed in accordance with the following 26
144	144	table: 27
145	145	Filing status Amount 28
146	146	Single $5,350 29
147	147	Married filing jointly or qualifying widow(er) $8,900 30
148	148	Married filing separately $4,450 31
149	149	Head of Household $7,850 32
150	150	(4) Additional standard deduction for the aged and blind. 33
151	151	An additional standard deduction shall be allowed for individuals age sixty-five (65) or 34
152	152
153	153
154	154	LC000358 - Page 5 of 16
155	155	older or blind in the amount of $1,300 for individuals who are not married and $1,050 for 1
156	156	individuals who are married. 2
157	157	(5) Limitation on basic standard deduction in the case of certain dependents. 3
158	158	In the case of an individual to whom a deduction under section (E) is allowable to another 4
159	159	taxpayer, the basic standard deduction applicable to such individual shall not exceed the greater of: 5
160	160	(a) $850; 6
161	161	(b) The sum of $300 and such individual’s earned income; 7
162	162	(6) Certain individuals not eligible for standard deduction. 8
163	163	In the case of: 9
164	164	(a) A married individual filing a separate return where either spouse itemizes deductions; 10
165	165	(b) Nonresident alien individual; 11
166	166	(c) An estate or trust; 12
167	167	The standard deduction shall be zero. 13
168	168	(7) Adjustments for inflation. 14
169	169	Each dollar amount contained in paragraphs (3), (4) and (5) shall be increased by an amount 15
170	170	equal to: 16
171	171	(a) Such dollar amount contained in paragraphs (3), (4) and (5) in the year 1988, multiplied 17
172	172	by 18
173	173	(b) The cost-of-living adjustment determined under section (J) with a base year of 1988. 19
174	174	(D) Overall limitation on itemized deductions. 20
175	175	(1) General rule. 21
176	176	In the case of an individual whose adjusted gross income as modified by § 44-30-12 22
177	177	exceeds the applicable amount, the amount of the itemized deductions otherwise allowable for the 23
178	178	taxable year shall be reduced by the lesser of: 24
179	179	(a) Three percent (3%) of the excess of adjusted gross income as modified by § 44-30-12 25
180	180	over the applicable amount; or 26
181	181	(b) Eighty percent (80%) of the amount of the itemized deductions otherwise allowable for 27
182	182	such taxable year. 28
183	183	(2) Applicable amount. 29
184	184	(a) In general. 30
185	185	For purposes of this section, the term “applicable amount” means $156,400 ($78,200 in the 31
186	186	case of a separate return by a married individual) 32
187	187	(b) Adjustments for inflation. 33
188	188	Each dollar amount contained in paragraph (a) shall be increased by an amount equal to: 34
189	189
190	190
191	191	LC000358 - Page 6 of 16
192	192	(i) Such dollar amount contained in paragraph (a) in the year 1991, multiplied by 1
193	193	(ii) The cost-of-living adjustment determined under section (J) with a base year of 1991. 2
194	194	(3) Phase-out of Limitation. 3
195	195	(a) In general. 4
196	196	In the case of taxable year beginning after December 31, 2005, and before January 1, 2010, 5
197	197	the reduction under section (1) shall be equal to the applicable fraction of the amount which would 6
198	198	be the amount of such reduction. 7
199	199	(b) Applicable fraction. 8
200	200	For purposes of paragraph (a), the applicable fraction shall be determined in accordance 9
201	201	with the following table: 10
202	202	For taxable years beginning in calendar year The applicable fraction is 11
203	203	2006 and 2007 ⅔ 12
204	204	2008 and 2009 ⅓ 13
205	205	(E) Exemption amount. 14
206	206	(1) In general. 15
207	207	Except as otherwise provided in this subsection, the term “exemption amount” means 16
208	208	$3,400. 17
209	209	(2) Exemption amount disallowed in case of certain dependents. 18
210	210	In the case of an individual with respect to whom a deduction under this section is allowable 19
211	211	to another taxpayer for the same taxable year, the exemption amount applicable to such individual 20
212	212	for such individual's taxable year shall be zero. 21
213	213	(3) Adjustments for inflation. 22
214	214	The dollar amount contained in paragraph (1) shall be increased by an amount equal to: 23
215	215	(a) Such dollar amount contained in paragraph (1) in the year 1989, multiplied by 24
216	216	(b) The cost-of-living adjustment determined under section (J) with a base year of 1989. 25
217	217	(4) Limitation. 26
218	218	(a) In general. 27
219	219	In the case of any taxpayer whose adjusted gross income as modified for the taxable year 28
220	220	exceeds the threshold amount shall be reduced by the applicable percentage. 29
221	221	(b) Applicable percentage. 30
222	222	In the case of any taxpayer whose adjusted gross income for the taxable year exceeds the 31
223	223	threshold amount, the exemption amount shall be reduced by two (2) percentage points for each 32
224	224	$2,500 (or fraction thereof) by which the taxpayer’s adjusted gross income for the taxable year 33
225	225	exceeds the threshold amount. In the case of a married individual filing a separate return, the 34
226	226
227	227
228	228	LC000358 - Page 7 of 16
229	229	preceding sentence shall be applied by substituting ‘‘$1,250’’ for ‘‘$2,500.’’ In no event shall the 1
230	230	applicable percentage exceed one hundred percent (100%). 2
231	231	(c) Threshold Amount. 3
232	232	For the purposes of this paragraph, the term ‘‘threshold amount’’ shall be determined with 4
233	233	the following table: 5
234	234	Filing status Amount 6
235	235	Single $156,400 7
236	236	Married filing jointly of qualifying widow(er) $234,600 8
237	237	Married filing separately $117,300 9
238	238	Head of Household $195,500 10
239	239	(d) Adjustments for inflation. 11
240	240	Each dollar amount contained in paragraph (b) shall be increased by an amount equal to: 12
241	241	(i) Such dollar amount contained in paragraph (b) in the year 1991, multiplied by 13
242	242	(ii) The cost-of-living adjustment determined under section (J) with a base year of 1991. 14
243	243	(5) Phase-out of limitation. 15
244	244	(a) In general. 16
245	245	In the case of taxable years beginning after December 31, 2005, and before January 1, 17
246	246	2010, the reduction under section 4 shall be equal to the applicable fraction of the amount which 18
247	247	would be the amount of such reduction. 19
248	248	(b) Applicable fraction. 20
249	249	For the purposes of paragraph (a), the applicable fraction shall be determined in accordance 21
250	250	with the following table: 22
251	251	For taxable years beginning in calendar year The applicable fraction is 23
252	252	2006 and 2007 ⅔ 24
253	253	2008 and 2009 ⅓ 25
254	254	(F) Alternative minimum tax. 26
255	255	(1) General rule. There is hereby imposed (in addition to any other tax imposed by this 27
256	256	subtitle) a tax equal to the excess (if any) of: 28
257	257	(a) The tentative minimum tax for the taxable year, over 29
258	258	(b) The regular tax for the taxable year. 30
259	259	(2) The tentative minimum tax for the taxable year is the sum of: 31
260	260	(a) 6.5 percent of so much of the taxable excess as does not exceed $175,000, plus 32
261	261	(b) 7.0 percent of so much of the taxable excess above $175,000. 33
262	262	(3) The amount determined under the preceding sentence shall be reduced by the alternative 34
263	263
264	264
265	265	LC000358 - Page 8 of 16
266	266	minimum tax foreign tax credit for the taxable year. 1
267	267	(4) Taxable excess. For the purposes of this subsection the term “taxable excess” means so 2
268	268	much of the federal alternative minimum taxable income as modified by the modifications in § 44-3
269	269	30-12 as exceeds the exemption amount. 4
270	270	(5) In the case of a married individual filing a separate return, subparagraph (2) shall be 5
271	271	applied by substituting “$87,500” for $175,000 each place it appears. 6
272	272	(6) Exemption amount. 7
273	273	For purposes of this section "exemption amount" means: 8
274	274	Filing status Amount 9
275	275	Single $39,150 10
276	276	Married filing jointly or qualifying widow(er) $53,700 11
277	277	Married filing separately $26,850 12
278	278	Head of Household $39,150 13
279	279	Estate or trust $24,650 14
280	280	(7) Treatment of unearned income of minor children 15
281	281	(a) In general. 16
282	282	In the case of a minor child, the exemption amount for purposes of section (6) shall not 17
283	283	exceed the sum of: 18
284	284	(i) Such child's earned income, plus 19
285	285	(ii) $6,000. 20
286	286	(8) Adjustments for inflation. 21
287	287	The dollar amount contained in paragraphs (6) and (7) shall be increased by an amount 22
288	288	equal to: 23
289	289	(a) Such dollar amount contained in paragraphs (6) and (7) in the year 2004, multiplied by 24
290	290	(b) The cost-of-living adjustment determined under section (J) with a base year of 2004. 25
291	291	(9) Phase-out. 26
292	292	(a) In general. 27
293	293	The exemption amount of any taxpayer shall be reduced (but not below zero) by an amount 28
294	294	equal to twenty-five percent (25%) of the amount by which alternative minimum taxable income 29
295	295	of the taxpayer exceeds the threshold amount. 30
296	296	(b) Threshold amount. 31
297	297	For purposes of this paragraph, the term “threshold amount” shall be determined with the 32
298	298	following table: 33
299	299	Filing status Amount 34
300	300
301	301
302	302	LC000358 - Page 9 of 16
303	303	Single $123,250 1
304	304	Married filing jointly or qualifying widow(er) $164,350 2
305	305	Married filing separately $82,175 3
306	306	Head of Household $123,250 4
307	307	Estate or Trust $82,150 5
308	308	(c) Adjustments for inflation 6
309	309	Each dollar amount contained in paragraph (9) shall be increased by an amount equal to: 7
310	310	(i) Such dollar amount contained in paragraph (9) in the year 2004, multiplied by 8
311	311	(ii) The cost-of-living adjustment determined under section (J) with a base year of 2004. 9
312	312	(G) Other Rhode Island taxes. 10
313	313	(1) General rule. There is hereby imposed (in addition to any other tax imposed by this 11
314	314	subtitle) a tax equal to twenty-five percent (25%) of: 12
315	315	(a) The Federal income tax on lump-sum distributions. 13
316	316	(b) The Federal income tax on parents' election to report child's interest and dividends. 14
317	317	(c) The recapture of Federal tax credits that were previously claimed on Rhode Island 15
318	318	return. 16
319	319	(H) Tax for children under 18 with investment income. 17
320	320	(1) General rule. There is hereby imposed a tax equal to twenty-five percent (25%) of: 18
321	321	(a) The Federal tax for children under the age of 18 with investment income. 19
322	322	(I) Averaging of farm income. 20
323	323	(1) General rule. At the election of an individual engaged in a farming business or fishing 21
324	324	business, the tax imposed in section 2 shall be equal to twenty-five percent (25%) of: 22
325	325	(a) The Federal averaging of farm income as determined in IRC section 1301 [26 U.S.C. § 23
326	326	1301]. 24
327	327	(J) Cost-of-living adjustment. 25
328	328	(1) In general. 26
329	329	The cost-of-living adjustment for any calendar year is the percentage (if any) by which: 27
330	330	(a) The CPI for the preceding calendar year exceeds 28
331	331	(b) The CPI for the base year. 29
332	332	(2) CPI for any calendar year. 30
333	333	For purposes of paragraph (1), the CPI for any calendar year is the average of the consumer 31
334	334	price index as of the close of the twelve (12) month period ending on August 31 of such calendar 32
335	335	year. 33
336	336	(3) Consumer price index. 34
337	337
338	338
339	339	LC000358 - Page 10 of 16
340	340	For purposes of paragraph (2), the term “consumer price index” means the last consumer 1
341	341	price index for all urban consumers published by the department of labor. For purposes of the 2
342	342	preceding sentence, the revision of the consumer price index that is most consistent with the 3
343	343	consumer price index for calendar year 1986 shall be used. 4
344	344	(4) Rounding. 5
345	345	(a) In general. 6
346	346	If any increase determined under paragraph (1) is not a multiple of $50, such increase shall 7
347	347	be rounded to the next lowest multiple of $50. 8
348	348	(b) In the case of a married individual filing a separate return, subparagraph (a) shall be 9
349	349	applied by substituting “$25” for $50 each place it appears. 10
350	350	(K) Credits against tax. For tax years beginning on or after January 1, 2001, a taxpayer 11
351	351	entitled to any of the following federal credits enacted prior to January 1, 1996, shall be entitled to 12
352	352	a credit against the Rhode Island tax imposed under this section: 13
353	353	(1) [Deleted by P.L. 2007, ch. 73, art. 7, § 5.] 14
354	354	(2) Child and dependent care credit; 15
355	355	(3) General business credits; 16
356	356	(4) Credit for elderly or the disabled; 17
357	357	(5) Credit for prior year minimum tax; 18
358	358	(6) Mortgage interest credit; 19
359	359	(7) Empowerment zone employment credit; 20
360	360	(8) Qualified electric vehicle credit. 21
361	361	(L) Credit against tax for adoption. For tax years beginning on or after January 1, 2006, 22
362	362	a taxpayer entitled to the federal adoption credit shall be entitled to a credit against the Rhode Island 23
363	363	tax imposed under this section if the adopted child was under the care, custody, or supervision of 24
364	364	the Rhode Island department of children, youth and families prior to the adoption. 25
365	365	(M) The credit shall be twenty-five percent (25%) of the aforementioned federal credits 26
366	366	provided there shall be no deduction based on any federal credits enacted after January 1, 1996, 27
367	367	including the rate reduction credit provided by the federal Economic Growth and Tax 28
368	368	Reconciliation Act of 2001 (EGTRRA). In no event shall the tax imposed under this section be 29
369	369	reduced to less than zero. A taxpayer required to recapture any of the above credits for federal tax 30
370	370	purposes shall determine the Rhode Island amount to be recaptured in the same manner as 31
371	371	prescribed in this subsection. 32
372	372	(N) Rhode Island earned-income credit. 33
373	373	(1) In general. 34
374	374
375	375
376	376	LC000358 - Page 11 of 16
377	377	For tax years beginning before January 1, 2015, a taxpayer entitled to a federal earned-1
378	378	income credit shall be allowed a Rhode Island earned-income credit equal to twenty-five percent 2
379	379	(25%) of the federal earned-income credit. Such credit shall not exceed the amount of the Rhode 3
380	380	Island income tax. 4
381	381	For tax years beginning on or after January 1, 2015, and before January 1, 2016, a taxpayer 5
382	382	entitled to a federal earned-income credit shall be allowed a Rhode Island earned-income credit 6
383	383	equal to ten percent (10%) of the federal earned-income credit. Such credit shall not exceed the 7
384	384	amount of the Rhode Island income tax. 8
385	385	For tax years beginning on or after January 1, 2016, a taxpayer entitled to a federal earned-9
386	386	income credit shall be allowed a Rhode Island earned-income credit equal to twelve and one-half 10
387	387	percent (12.5%) of the federal earned-income credit. Such credit shall not exceed the amount of the 11
388	388	Rhode Island income tax. 12
389	389	For tax years beginning on or after January 1, 2017, a taxpayer entitled to a federal earned-13
390	390	income credit shall be allowed a Rhode Island earned-income credit equal to fifteen percent (15%) 14
391	391	of the federal earned-income credit. Such credit shall not exceed the amount of the Rhode Island 15
392	392	income tax. 16
393	393	(2) Refundable portion. 17
394	394	In the event the Rhode Island earned-income credit allowed under paragraph (N)(1) of this 18
395	395	section exceeds the amount of Rhode Island income tax, a refundable earned-income credit shall 19
396	396	be allowed as follows. 20
397	397	(i) For tax years beginning before January 1, 2015, for purposes of paragraph (2) refundable 21
398	398	earned-income credit means fifteen percent (15%) of the amount by which the Rhode Island earned-22
399	399	income credit exceeds the Rhode Island income tax. 23
400	400	(ii) For tax years beginning on or after January 1, 2015, for purposes of paragraph (2) 24
401	401	refundable earned-income credit means one hundred percent (100%) of the amount by which the 25
402	402	Rhode Island earned-income credit exceeds the Rhode Island income tax. 26
403	403	(O) The tax administrator shall recalculate and submit necessary revisions to paragraphs 27
404	404	(A) through (J) to the general assembly no later than February 1, 2010, and every three (3) years 28
405	405	thereafter for inclusion in the statute. 29
406	406	(3) For the period January 1, 2011, through December 31, 2011, and thereafter, “Rhode 30
407	407	Island taxable income” means federal adjusted gross income as determined under the Internal 31
408	408	Revenue Code, 26 U.S.C. § 1 et seq., and as modified for Rhode Island purposes pursuant to § 44-32
409	409	30-12 less the amount of Rhode Island Basic Standard Deduction allowed pursuant to subparagraph 33
410	410	44-30-2.6(c)(3)(B), and less the amount of personal exemption allowed pursuant to subparagraph 34
411	411
412	412
413	413	LC000358 - Page 12 of 16
414	414	44-30-2.6(c)(3)(C). 1
415	415	(A) Tax imposed. 2
416	416	(I) There is hereby imposed on the taxable income of married individuals filing joint 3
417	417	returns, qualifying widow(er), every head of household, unmarried individuals, married individuals 4
418	418	filing separate returns and bankruptcy estates, a tax determined in accordance with the following 5
419	419	table: 6
420	420	RI Taxable Income RI Income Tax 7
421	421	Over But not over Pay + % on Excess on the amount over 8
422	422	$ 0 - $ 55,000 $ 0 + 3.75% $ 0 9
423	423	55,000 - 125,000 2,063 + 4.75% 55,000 10
424	424	125,000 - 5,388 + 5.99% 125,000 11
425	425	(II) There is hereby imposed on the taxable income of an estate or trust a tax determined in 12
426	426	accordance with the following table: 13
427	427	RI Taxable Income RI Income Tax 14
428	428	Over But not over Pay + % on Excess on the amount over 15
429	429	$ 0 - $ 2,230 $ 0 + 3.75% $ 0 16
430	430	2,230 - 7,022 84 + 4.75% 2,230 17
431	431	7,022 - 312 + 5.99% 7,022 18
432	432	(B) Deductions: 19
433	433	(I) Rhode Island Basic Standard Deduction. 20
434	434	Only the Rhode Island standard deduction shall be allowed in accordance with the 21
435	435	following table: 22
436	436	Filing status: Amount 23
437	437	Single $7,500 24
438	438	Married filing jointly or qualifying widow(er) $15,000 25
439	439	Married filing separately $7,500 26
440	440	Head of Household $11,250 27
441	441	(II) Nonresident alien individuals, estates and trusts are not eligible for standard 28
442	442	deductions. 29
443	443	(III) In the case of any taxpayer whose adjusted gross income, as modified for Rhode Island 30
444	444	purposes pursuant to § 44-30-12, for the taxable year exceeds one hundred seventy-five thousand 31
445	445	dollars ($175,000), the standard deduction amount shall be reduced by the applicable percentage. 32
446	446	The term “applicable percentage” means twenty (20) percentage points for each five thousand 33
447	447	dollars ($5,000) (or fraction thereof) by which the taxpayer’s adjusted gross income for the taxable 34
448	448
449	449
450	450	LC000358 - Page 13 of 16
451	451	year exceeds one hundred seventy-five thousand dollars ($175,000). 1
452	452	(C) Exemption Amount: 2
453	453	(I) The term “exemption amount” means three thousand five hundred dollars ($3,500) 3
454	454	multiplied by the number of exemptions allowed for the taxable year for federal income tax 4
455	455	purposes. For tax years beginning on or after 2018, the term “exemption amount” means the same 5
456	456	as it does in 26 U.S.C. § 151 and 26 U.S.C. § 152 just prior to the enactment of the Tax Cuts and 6
457	457	Jobs Act (Pub. L. No. 115-97) on December 22, 2017. 7
458	458	(II) Exemption amount disallowed in case of certain dependents. In the case of an 8
459	459	individual with respect to whom a deduction under this section is allowable to another taxpayer for 9
460	460	the same taxable year, the exemption amount applicable to such individual for such individual’s 10
461	461	taxable year shall be zero. 11
462	462	(III) Identifying information required. 12
463	463	(1) Except as provided in § 44-30-2.6(c)(3)(C)(II) of this section, no exemption shall be 13
464	464	allowed under this section with respect to any individual unless the Taxpayer Identification Number 14
465	465	of such individual is included on the federal return claiming the exemption for the same tax filing 15
466	466	period. 16
467	467	(2) Notwithstanding the provisions of § 44-30-2.6(c)(3)(C)(I) of this section, in the event 17
468	468	that the Taxpayer Identification Number for each individual is not required to be included on the 18
469	469	federal tax return for the purposes of claiming a personal exemption(s), then the Taxpayer 19
470	470	Identification Number must be provided on the Rhode Island tax return for the purpose of claiming 20
471	471	said exemption(s). 21
472	472	(D) In the case of any taxpayer whose adjusted gross income, as modified for Rhode Island 22
473	473	purposes pursuant to § 44-30-12, for the taxable year exceeds one hundred seventy-five thousand 23
474	474	dollars ($175,000), the exemption amount shall be reduced by the applicable percentage. The term 24
475	475	“applicable percentage” means twenty (20) percentage points for each five thousand dollars 25
476	476	($5,000) (or fraction thereof) by which the taxpayer’s adjusted gross income for the taxable year 26
477	477	exceeds one hundred seventy-five thousand dollars ($175,000). 27
478	478	(E) Adjustment for inflation. The dollar amount contained in subparagraphs 44-30-28
479	479	2.6(c)(3)(A), 44-30-2.6(c)(3)(B) and 44-30-2.6(c)(3)(C) shall be increased annually by an amount 29
480	480	equal to: 30
481	481	(I) Such dollar amount contained in subparagraphs 44-30-2.6(c)(3)(A), 44-30-2.6(c)(3)(B) 31
482	482	and 44-30-2.6(c)(3)(C) adjusted for inflation using a base tax year of 2000, multiplied by; 32
483	483	(II) The cost-of-living adjustment with a base year of 2000. 33
484	484	(III) For the purposes of this section, the cost-of-living adjustment for any calendar year is 34
485	485
486	486
487	487	LC000358 - Page 14 of 16
488	488	the percentage (if any) by which the consumer price index for the preceding calendar year exceeds 1
489	489	the consumer price index for the base year. The consumer price index for any calendar year is the 2
490	490	average of the consumer price index as of the close of the twelve-month (12) period ending on 3
491	491	August 31, of such calendar year. 4
492	492	(IV) For the purpose of this section the term “consumer price index” means the last 5
493	493	consumer price index for all urban consumers published by the department of labor. For the purpose 6
494	494	of this section the revision of the consumer price index that is most consistent with the consumer 7
495	495	price index for calendar year 1986 shall be used. 8
496	496	(V) If any increase determined under this section is not a multiple of fifty dollars ($50.00), 9
497	497	such increase shall be rounded to the next lower multiple of fifty dollars ($50.00). In the case of a 10
498	498	married individual filing separate return, if any increase determined under this section is not a 11
499	499	multiple of twenty-five dollars ($25.00), such increase shall be rounded to the next lower multiple 12
500	500	of twenty-five dollars ($25.00). 13
501	501	(F) Credits against tax. 14
502	502	(I) Notwithstanding any other provisions of Rhode Island Law, for tax years beginning on 15
503	503	or after January 1, 2011, the only credits allowed against a tax imposed under this chapter shall be 16
504	504	as follows: 17
505	505	(a) Rhode Island earned-income credit: Credit shall be allowed for earned-income credit 18
506	506	pursuant to subparagraph 44-30-2.6(c)(2)(N). 19
507	507	(b) Property Tax Relief Credit: Credit shall be allowed for property tax relief as provided 20
508	508	in § 44-33-1 et seq. 21
509	509	(c) Lead Paint Credit: Credit shall be allowed for residential lead abatement income tax 22
510	510	credit as provided in § 44-30.3-1 et seq. 23
511	511	(d) Credit for income taxes of other states. Credit shall be allowed for income tax paid to 24
512	512	other states pursuant to § 44-30-74. 25
513	513	(e) Historic Structures Tax Credit: Credit shall be allowed for historic structures tax credit 26
514	514	as provided in § 44-33.2-1 et seq. 27
515	515	(f) Motion Picture Productions Tax Credit: Credit shall be allowed for motion picture 28
516	516	production tax credit as provided in § 44-31.2-1 et seq. 29
517	517	(g) Child and Dependent Care: Credit shall be allowed for twenty-five percent (25%) of 30
518	518	the federal child and dependent care credit allowable for the taxable year for federal purposes; 31
519	519	provided, however, such credit shall not exceed the Rhode Island tax liability. 32
520	520	(h) Tax credits for contributions to Scholarship Organizations: Credit shall be allowed for 33
521	521	contributions to scholarship organizations as provided in chapter 62 of title 44. 34
522	522
523	523
524	524	LC000358 - Page 15 of 16
525	525	(i) Credit for tax withheld. Wages upon which tax is required to be withheld shall be taxable 1
526	526	as if no withholding were required, but any amount of Rhode Island personal income tax actually 2
527	527	deducted and withheld in any calendar year shall be deemed to have been paid to the tax 3
528	528	administrator on behalf of the person from whom withheld, and the person shall be credited with 4
529	529	having paid that amount of tax for the taxable year beginning in that calendar year. For a taxable 5
530	530	year of less than twelve (12) months, the credit shall be made under regulations of the tax 6
531	531	administrator. 7
532	532	(j) Stay Invested in RI Wavemaker Fellowship: Credit shall be allowed for stay invested in 8
533	533	RI wavemaker fellowship program as provided in § 42-64.26-1 et seq. 9
534	534	(k) Rebuild Rhode Island: Credit shall be allowed for rebuild RI tax credit as provided in 10
535	535	§ 42-64.20-1 et seq. 11
536	536	(l) Rhode Island Qualified Jobs Incentive Program: Credit shall be allowed for Rhode 12
537	537	Island new qualified jobs incentive program credit as provided in § 44-48.3-1 et seq. 13
538	538	(m) Historic homeownership assistance act: Effective for tax year 2017 and thereafter, 14
539	539	unused carryforward for such credit previously issued shall be allowed for the historic 15
540	540	homeownership assistance act as provided in § 44-33.1-4. This allowance is for credits already 16
541	541	issued pursuant to § 44-33.1-4 and shall not be construed to authorize the issuance of new credits 17
542	542	under the historic homeownership assistance act. 18
543	543	(2) Except as provided in section 1 above, no other state and federal tax credit shall be 19
544	544	available to the taxpayers in computing tax liability under this chapter. 20
545	545	SECTION 2. This act shall take effect on January 1, 2024. 21
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547	547	LC000358
548	548	========
549	549
550	550
551	551	LC000358 - Page 16 of 16
552	552	EXPLANATION
553	553	BY THE LEGISLATIVE COUNCIL
554	554	OF
555	555	A N A C T
556	556	RELATING TO TAXATION -- PERSONAL INCOME TAX
557	557	***
558	558	This act would create a new income tax bracket for purposes of Rhode Island income 1
559	559	taxation. The new bracket would be eleven and nine tenths percent (11.90%) on taxable income 2
560	560	over five hundred thousand dollars ($500,000). 3
561	561	This act would take effect on January 1, 2024. 4
562	562	========
563	563	LC000358
564	564	========
565	565