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Retirement Income Exemption Increase

By July 18, 2022Uncategorized

Rhode Island Increases the Amount of Retirement Income You Can Receive Without Paying Income Tax

A Rhode Island personal income tax modification applies for income from private sector pensions, government pensions, 401(k) plans, 403(b) plans, and other such sources.
For eligible taxpayers, up to $20,000 of their federally taxable income from sources such as pensions, 401(k) plans, and annuities, may be excluded as income subject to Rhode Island personal income tax.

Rhode Island is making it easier on retirees and income taxes

The retirement income exemption applies to qualified taxpayers who:
• Have a federal adjusted gross income (AGI) that includes taxable income from sources such as pensions, 401(k) plans, and annuities;
• Have reached “full retirement age” as defined by the Social Security Administration; and
• Have a federal AGI below a certain amount.

This new law increases the current amount of taxable pension and/or annuity income that can be exempted from $15,000 to $20,000 starting with tax year 2023.
Any military pension included in federal adjusted gross income should not be included within this modification. In this case, taxpayers should refer to subsection 11.
Effective: 7/1/2022
Citation: House Bill 7123, Substitute A as amended
Affects: http://webserver.rilegislature.gov/Statutes/TITLE44/44-30/44-30-12.htm

 

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Matthew J. Leonard, Esq. has devoted his practice to handling the legal needs of individuals and their business interests through all stages of life. As an attorney with the law firm of Salter McGowan Sylvia & Leonard, Inc., he has been engaged to handle matters from basic to sophisticated involving Estate Planning, Elder Law, Medicaid Planning, Probate, Trust and Estate Administration, Real Estate, Business Transactions, Business Creation and related litigation.