Rhode Island Senate Bill S3018

Rhode Island 2026 Regular Session

• Introduced: 3/5/26
• Refer: 3/5/26

Caption

RELATING TO TAXATION -- PERSONAL INCOME TAX

Summary

S3018 amends Rhode Island’s personal income tax law to expand the state subtraction modification for retirement income. The bill increases the amount of taxable pension and annuity income, including individual retirement account income, that certain older taxpayers may subtract from federal adjusted gross income for Rhode Island tax purposes. Under the bill, eligible taxpayers may subtract up to $50,000 of such income for tax years beginning on or after January 1, 2025, replacing the prior lower thresholds that had applied in earlier years. The bill keeps the existing income-based eligibility structure tied to Social Security retirement age and filing status. It applies to taxpayers who have attained full or unreduced Social Security retirement age and whose income falls below the specified thresholds, and it continues to require that the taxpayer have no pension income included in federal adjusted gross income for the year. The measure takes effect upon passage and is framed as a tax relief provision for retirees relying on IRA and annuity income.

Impact

The bill would amend § 44-30-12 of the Rhode Island General Laws, which defines Rhode Island income for resident individuals and lists additions and subtractions from federal adjusted gross income. Its main effect is to enlarge the retirement-income subtraction for qualifying taxpayers, thereby reducing state taxable income and potentially lowering personal income tax liability for retirees with IRA and annuity income. Because the change is embedded in the state’s income-tax conformity and modification rules, it affects how the Division of Taxation and taxpayers compute Rhode Island taxable income beginning with the 2025 tax year.

Sentiment

Based on the bill text and caption, the measure appears generally favorable to taxpayers, especially retirees, because it expands a tax benefit rather than imposing a new tax or restriction. There is no recorded committee transcript or vote history in the provided materials, so no formal opposition or support can be identified from debate. The overall tone of the proposal is pro-relief and pro-retiree.

Contention

The main policy issue is the cost and targeting of the expanded subtraction. Supporters would likely view the bill as helping retirees keep more of their pension and IRA income, while potential critics could question whether the benefit is too broad, whether it disproportionately aids higher-income retirees, and what the revenue impact would be on the state budget. The bill also preserves a condition that the taxpayer have no pension income, which may create a distinction between retirees with different mixes of retirement income and could be a point of discussion if the measure were debated.