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Category: Rhode Island

Rhode Island Subtractions from Income

Modifications DECREASING Federal AGI

Below is a list of allowable modifications that can be used to decrease your Federal adjusted gross income that are not subject to Rhode Island tax. They include:


  • Income from obligations of the US government included in Federal AGI but exempt from state income taxes.
  • Rhode Island fiduciary adjustment as beneficiary of an estate or trust.
  • Elective deduction for new research and development facilities.
  • Railroad Retirement benefits included in gross income for federal income tax purposes but exempt from state income taxes under the laws of the United States.
  • Qualifying investment in a certified venture capital partnership.
  • Family Education Accounts
  • Tuition Saving Program (section 529 accounts) - A modification decreasing federal adjusted gross income may be claimed for any contributions made to a Rhode Island account under the tuition savings program. The maximum modification shall not exceed $500, $1,000 if a joint return.
  • Exemptions from a tax on profit or gain for writers, composers and artists residing within a section of the defined Economic Development Zone as defined in RIGL 44-30-1.1 within the cities of Newport, Providence, Pawtucket, Woonsocket, or Warwick, or the Towns of Little Compton, Tiverton, Warren or Westerly and creating artistic works while a resident of the Zone. Taxpayers claiming these modifications must submit a schedule showing the source and amount of income claimed to be exempt.
  • Depreciation that has not been taken for federal purposes because of the bonus depreciation that must be subtracted from Rhode Island income.
  • Depreciation that has not been taken for federal purposes because of the increased section 179 depreciation was not taken originally.
  • Modification for exclusion for qualifying option under RIGL 44-39.3 AND modification for exclusion for qualifying securities or investments under RIGL 44-43-8.
  • Allowable modification for performance based compensation realized by an eligible employee under the Rhode Island Jobs Growth Act.
  • Modification for Tax Incentives for Employers
  • Historic Tax Credit income or Motion Picture Production Company Tax Credit income reported on Federal return that is tax exempt.
  • Active duty military pay of Nonresidents stationed in Rhode Island and income for services performed in Rhode Island by the servicemember's spouse.
  • Contributions to a Scituate Medical Savings Account deemed taxable under the Internal Revenue Code, but tax exempt for Rhode Island purposes.
  • Amounts of insurance benefits for dependents and domestic partners included in Federal AGI pursuant to chapter 12 of title 36 or other coverage plan
  • Modification for Organ Transplantation for specific unreimbursed expenses incurred by Rhode Island Resident.
  • Modification for Rhode Island Resident business owner in certified enterprise zone.
  • Income from the discharge of business indebtedness claimed as income on Federal return and previously claimed as RI income under the American Recovery and Reinvestment Act of 2009.


For additional information, please see Schedule M and Form 1040 Instructions.