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.)
