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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.