§44-30-12  Rhode Island income of a resident individual. –


Published: 2015

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TITLE 44

Taxation

CHAPTER 44-30

Personal Income Tax

PART 44-30-11

Residents

SECTION 44-30-12



   § 44-30-12  Rhode Island income of a

resident individual. –

(a) General. The Rhode Island income of a resident individual means his

or her adjusted gross income for federal income tax purposes, with the

modifications specified in this section.



   (b) Modifications increasing federal adjusted gross

income. There shall be added to federal adjusted gross income:



   (1) Interest income on obligations of any state, or its

political subdivisions, other than Rhode Island or its political subdivisions;



   (2) Interest or dividend income on obligations or securities

of any authority, commission, or instrumentality of the United States, but not

of Rhode Island or its political subdivisions, to the extent exempted by the

laws of the United States from federal income tax but not from state income

taxes;



   (3) The modification described in § 44-30-25(g);



   (4)(i) The amount defined below of a nonqualified withdrawal

made from an account in the tuition savings program pursuant to §

16-57-6.1. For purposes of this section, a nonqualified withdrawal is:



   (A) A transfer or rollover to a qualified tuition program

under Section 529 of the Internal Revenue Code, 26 U.S.C. § 529, other

than to the tuition savings program referred to in § 16-57-6.1; and



   (B) A withdrawal or distribution which is:



   (I) Not applied on a timely basis to pay "qualified higher

education expenses" as defined in § 16-57-3(12) of the beneficiary of the

account from which the withdrawal is made;



   (II) Not made for a reason referred to in §

16-57-6.1(e); or



   (III) Not made in other circumstances for which an exclusion

from tax made applicable by Section 529 of the Internal Revenue Code, 26 U.S.C.

§ 529, pertains if the transfer, rollover, withdrawal or distribution is

made within two (2) taxable years following the taxable year for which a

contributions modification pursuant to subdivision (c)(4) of this section is

taken based on contributions to any tuition savings program account by the

person who is the participant of the account at the time of the contribution,

whether or not the person is the participant of the account at the time of the

transfer, rollover, withdrawal or distribution;



   (ii) In the event of a nonqualified withdrawal under

subparagraphs (i)(A) or (i)(B) of this subdivision, there shall be added to the

federal adjusted gross income of that person for the taxable year of the

withdrawal an amount equal to the lesser of:



   (A) The amount equal to the nonqualified withdrawal reduced

by the sum of any administrative fee or penalty imposed under the tuition

savings program in connection with the nonqualified withdrawal plus the

earnings portion thereof, if any, includible in computing the person's federal

adjusted gross income for the taxable year; and



   (B) The amount of the person's contribution modification

pursuant to subdivision (c)(4) of this section for the person's taxable year of

the withdrawal and the two (2) prior taxable years less the amount of any

nonqualified withdrawal for the two (2) prior taxable years included in

computing the person's Rhode Island income by application of this subsection

for those years. Any amount added to federal adjusted gross income pursuant to

this subdivision shall constitute Rhode Island income for residents,

nonresidents and part-year residents; and



   (5) The modification described in § 44-30-25.1(d)(3)(i).



   (6) The amount equal to any unemployment compensation

received but not included in federal adjusted gross income.



   (7) The amount equal to the deduction allowed for sales tax

paid for a purchase of a qualified motor vehicle as defined by the Internal

Revenue Code § 164(a)(6).



   (c) Modifications reducing federal adjusted gross

income. There shall be subtracted from federal adjusted gross income:



   (1) Any interest income on obligations of the United States

and its possessions to the extent includible in gross income for federal income

tax purposes, and any interest or dividend income on obligations, or securities

of any authority, commission, or instrumentality of the United States to the

extent includible in gross income for federal income tax purposes but exempt

from state income taxes under the laws of the United States; provided, that the

amount to be subtracted shall in any case be reduced by any interest on

indebtedness incurred or continued to purchase or carry obligations or

securities the income of which is exempt from Rhode Island personal income tax,

to the extent the interest has been deducted in determining federal adjusted

gross income or taxable income;



   (2) A modification described in § 44-30-25(f) or §

44-30-1.1(c)(1);



   (3) The amount of any withdrawal or distribution from the

"tuition savings program" referred to in § 16-57-6.1 which is included in

federal adjusted gross income, other than a withdrawal or distribution or

portion of a withdrawal or distribution that is a nonqualified withdrawal;



   (4) Contributions made to an account under the tuition

savings program, including the "contributions carryover" pursuant to paragraph

(iv) of this subdivision, if any, subject to the following limitations,

restrictions and qualifications:



   (i) The aggregate subtraction pursuant to this subdivision

for any taxable year of the taxpayer shall not exceed five hundred dollars

($500) or one thousand dollars ($1,000) if a joint return;



   (ii) The following shall not be considered contributions:



   (A) Contributions made by any person to an account who is not

a participant of the account at the time the contribution is made;



   (B) Transfers or rollovers to an account from any other

tuition savings program account or from any other "qualified tuition program"

under section 529 of the Internal Revenue Code, 26 U.S.C. § 529; or



   (C) A change of the beneficiary of the account;



   (iii) The subtraction pursuant to this subdivision shall not

reduce the taxpayer's federal adjusted gross income to less than zero (0);



   (iv) The contributions carryover to a taxable year for

purpose of this subdivision is the excess, if any, of the total amount of

contributions actually made by the taxpayer to the tuition savings program for

all preceding taxable years for which this subsection is effective over the sum

of:



   (A) The total of the subtractions under this subdivision

allowable to the taxpayer for all such preceding taxable years; and



   (B) That part of any remaining contribution carryover at the

end of the taxable year which exceeds the amount of any nonqualified

withdrawals during the year and the prior two (2) taxable years not included in

the addition provided for in this subdivision for those years. Any such part

shall be disregarded in computing the contributions carryover for any

subsequent taxable year;



   (v) For any taxable year for which a contributions carryover

is applicable, the taxpayer shall include a computation of the carryover with

the taxpayer's Rhode Island personal income tax return for that year, and if

for any taxable year on which the carryover is based the taxpayer filed a joint

Rhode Island personal income tax return but filed a return on a basis other

than jointly for a subsequent taxable year, the computation shall reflect how

the carryover is being allocated between the prior joint filers; and



   (5) The modification described in § 44-30-25.1(d)(1).



   (6) Amounts deemed taxable income to the taxpayer due to

payment or provision of insurance benefits to a dependent, including a domestic

partner pursuant to chapter 12 of title 36 or other coverage plan.



   (7) Modification for organ transplantation.

(i)  An individual may subtract up to ten thousand dollars ($10,000)

from federal adjusted gross income if he or she, while living, donates one or

more of his or her human organs to another human being for human organ

transplantation, except that for purposes of this subsection, "human organ"

means all or part of a liver, pancreas, kidney, intestine, lung, or bone

marrow. A subtract modification that is claimed hereunder may be claimed in the

taxable year in which the human organ transplantation occurs.



   (ii) An individual may claim that subtract modification

hereunder only once, and the subtract modification may be claimed for only the

following unreimbursed expenses that are incurred by the claimant and related

to the claimant's organ donation:



   (A) Travel expenses.



   (B) Lodging expenses.



   (C) Lost wages.



   (iii) The subtract modification hereunder may not be claimed

by a part-time resident or a nonresident of this state.



   (8) Modification for taxable Social Security income.



   (i) For tax years beginning on or after January 1,

2016:



   (A) For a person who has attained the age used for

calculating full or unreduced social security retirement benefits who files a

return as an unmarried individual, head of household or married filing separate

whose federal adjusted gross income for such taxable year is less than eighty

thousand dollars ($80,000); or



   (B) A married individual filing jointly or individual filing

qualifying widow(er) who has attained the age used for calculating full or

unreduced social security retirement benefits whose federal adjusted gross

income for such taxable year is less than one hundred thousand dollars

($100,000), an amount equal to the social security benefits includable in

federal adjusted gross income.



   (ii) Adjustment for inflation. The dollar amount

contained in subparagraphs 44-30-12(c)(8)(i)(A) and 44-30-12(c)(8)(i)(B) shall

be increased annually by an amount equal to:



   (A) Such dollar amount contained in subparagraphs

44-30-12(c)(8)(i)(A) and 44-30-12(c)(8)(i)(B) adjusted for inflation using a

base tax year of 2000, multiplied by;



   (B) The cost-of-living adjustment with a base year of 2000.



   (iii) For the purposes of this section the cost-of-living

adjustment for any calendar year is the percentage (if any) by which the

consumer price index for the preceding calendar year exceeds the consumer price

index for the base year. The consumer price index for any calendar year is the

average of the consumer price index as of the close of the twelve (12) month

period ending on August 31, of such calendar year.



   (iv) For the purpose of this section the term "consumer price

index" means the last consumer price index for all urban consumers published by

the department of labor. For the purpose of this section the revision of the

consumer price index which is most consistent with the consumer price index for

calendar year 1986 shall be used.



   (v) If any increase determined under this section is not a

multiple of fifty dollars ($50.00), such increase shall be rounded to the next

lower multiple of fifty dollars ($50.00). In the case of a married individual

filing separate return, if any increase determined under this section is not a

multiple of twenty-five dollars ($25.00), such increase shall be rounded to the

next lower multiple of twenty-five dollars ($25.00).



   (d) Modification for Rhode Island fiduciary

adjustment. There shall be added to or subtracted from federal adjusted

gross income (as the case may be) the taxpayer's share, as beneficiary of an

estate or trust, of the Rhode Island fiduciary adjustment determined under

§ 44-30-17.



   (e) Partners. The amounts of modifications required to

be made under this section by a partner, which relate to items of income or

deduction of a partnership, shall be determined under § 44-30-15.



History of Section.

(P.L. 1971, ch. 8, art. 1, § 1; P.L. 1971, ch. 204, art. 3, § 1; P.L.

1972, ch. 155, art. 1, § 1; P.L. 1979, ch. 297, § 1; P.L. 1988, ch.

427, § 1; P.L. 1996, ch. 431, § 2; P.L. 2001, ch. 364, § 3; P.L.

2002, ch. 65, art. 9, § 1; P.L. 2002, ch. 215, § 3; P.L. 2006, ch.

189, § 3; P.L. 2006, ch. 316, § 3; P.L. 2009, ch. 5, art. 9, §

12; P.L. 2009, ch. 224, § 1; P.L. 2015, ch. 141, art. 11, §

12.)

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