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
