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.
Impact
This legislation is anticipated to significantly affect state laws surrounding income tax by providing larger modifications for residents' adjusted gross income. Particularly, elderly residents who rely on social security benefits and pension income will likely benefit from reduced state tax liabilities. By raising the income thresholds, the bill aims to alleviate some financial pressures on retirees, allowing them to retain more of their income, which could lead to increased economic stability for this demographic. However, it may also have implications for state revenue, as lower tax rates for certain groups could result in decreased income for the state budget.
Summary
Bill S2058, introduced in the Rhode Island General Assembly, seeks to amend the current statutes regarding personal income tax. Specifically, it proposes an increase in the federal adjusted gross income threshold for the modification of taxable social security income, allowing residents to potentially exclude more of their social security benefits from state income tax. Additionally, the bill addresses taxable retirement income from certain pension plans and annuities, altering the references to federal adjusted gross income for taxation purposes, aiming to provide individuals with greater financial relief in their retirement years.
Contention
The introduction of S2058 has sparked discussions among legislators regarding its potential financial impact on the state. Supporters argue that it is a necessary reform to help seniors maintain their quality of life and alleviate the taxation burden during retirement. In contrast, opponents raise concerns about the long-term implications on state revenue and budgets, arguing that it could limit resources available for other essential services. The debate reflects broader discussions on how states prioritize revenue generation versus supporting vulnerable populations, particularly the retired and elderly.
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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.
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.
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.