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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.

 

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