§ 44-30-2.6 Rhode Island taxable income– Rate of tax. – (a) "Rhode Island taxable income" means federal taxable income as determinedunder the Internal Revenue Code, 26 U.S.C. § 1 et seq., not including theincrease in the basic standard deduction amount for married couples filingjoint returns as provided in the Jobs and Growth Tax Relief Reconciliation Actof 2003 and the Economic Growth and Tax Relief Reconciliation Act of 2001(EGTRRA), and as modified by the modifications in § 44-30-12.
(b) Notwithstanding the provisions of §§ 44-30-1and 44-30-2, for tax years beginning on or after January 1, 2001, a RhodeIsland personal income tax is imposed upon the Rhode Island taxable income ofresidents and nonresidents, including estates and trusts, at the rate oftwenty-five and one-half percent (25.5%) for tax year 2001, and twenty-fivepercent (25%) for tax year 2002 and thereafter of the federal income tax rates,including capital gains rates and any other special rates for other types ofincome, except as provided in § 44-30-2.7, which were in effectimmediately prior to enactment of the Economic Growth and Tax ReliefReconciliation Act of 2001 (EGTRRA); provided, rate schedules shall be adjustedfor inflation by the tax administrator beginning in taxable year 2002 andthereafter in the manner prescribed for adjustment by the commissioner ofInternal Revenue in 26 U.S.C. § 1(f). However, for tax years beginning onor after January 1, 2006, a taxpayer may elect to use the alternative flat taxrate provided in § 44-30-2.10 to calculate his or her personal income taxliability.
(c) For tax years beginning on or after January 1, 2001, if ataxpayer has an alternative minimum tax for federal tax purposes, the taxpayershall determine if he or she has a Rhode Island alternative minimum tax. TheRhode Island alternative minimum tax shall be computed by multiplying thefederal tentative minimum tax without allowing for the increased exemptionsunder the Jobs and Growth Tax Relief Reconciliation Act of 2003 (asredetermined on federal form 6251 Alternative Minimum Tax-Individuals) bytwenty-five and one-half percent (25.5%) for tax year 2001, and twenty-fivepercent (25%) for tax year 2002 and thereafter, and comparing the product tothe Rhode Island tax as computed otherwise under this section. The excess shallbe the taxpayer's Rhode Island alternative minimum tax.
(1) For tax years beginning on or after January 1, 2005 andthereafter the exemption amount for alternative minimum tax, for Rhode Islandpurposes, shall be adjusted for inflation by the tax administrator in themanner prescribed for adjustment by the commissioner of Internal Revenue in 26U.S.C. § 1(f).
(2) For the period January 1, 2007 through December 31, 2007,and thereafter, Rhode Island taxable income shall be determined by deductingfrom federal adjusted gross income as defined in 26 U.S.C. § 62 asmodified by the modifications in § 44-30-12 the Rhode Island itemizeddeduction amount and the Rhode Island exemption amount as determined in thissection.
(A) Tax imposed.
(1) There is hereby imposed on the taxable income of marriedindividuals filing joint returns and surviving spouses a tax determined inaccordance with the following table:
SEE THE BOOK FOR THE PROPER TABLE.
(2) There is hereby imposed on the taxable income of everyhead of household a tax determined in accordance with the following table:
SEE THE BOOK FOR THE PROPER TABLE.
(3) There is hereby imposed on the taxable income ofunmarried individuals (other than surviving spouses and heads of households) atax determined in accordance with the following table:
SEE THE BOOK FOR THE PROPER TABLE.
(4) There is hereby imposed on the taxable income of marriedindividuals filing separate returns and bankruptcy estates a tax determined inaccordance with the following table:
SEE THE BOOK FOR THE PROPER TABLE.
(5) There is hereby imposed a taxable income of an estate ortrust a tax determined in accordance with the following table:
SEE THE BOOK FOR THE PROPER TABLE.
(6) Adjustments for inflation.
The dollars amount contained in paragraph (A) shall beincreased by an amount equal to:
(a) Such dollar amount contained in paragraph (A) in the year1993, multiplied by;
(b) The cost-of-living adjustment determined under section(J) with a base year of 1993;
(c) The cost-of-living adjustment referred to in subparagraph(a) and (b) used in making adjustments to the nine percent (9%) and nine andnine tenths percent (9.9%) dollar amounts shall be determined under section (J)by substituting "1994" for "1993."
(B) Maximum capital gains rates
(1) In general
If a taxpayer has a net capital gain for tax years endingprior to January 1, 2010, the tax imposed by this section for such taxable yearshall not exceed the sum of:
(a) 2.5 % of the net capital gain as reported for federalincome tax purposes under section 26 U.S.C. 1(h)(1)(a) and 26 U.S.C. 1(h)(1)(b).
(b) 5% of the net capital gain as reported for federal incometax purposes under 26 U.S.C. 1(h)(1)(c).
(c) 6.25% of the net capital gain as reported for federalincome tax purposes under 26 U.S.C. 1(h)(1)(d).
(d) 7% of the net capital gain as reported for federal incometax purposes under 26 U.S.C. 1(h)(1)(e).
(2) For tax years beginning on or after January 1, 2010 thetax imposed on net capital gain shall be determined under subdivision44-30-2.6(c)(2)(A).
(C) Itemized deductions.
(1) In general
For the purposes of section (2) "itemized deductions" meansthe amount of federal itemized deductions as modified by the modifications in§ 44-30-12.
(2) Individuals who do not itemize their deductions
In the case of an individual who does not elect to itemizehis deductions for the taxable year, they may elect to take a standarddeduction.
(3) Basic standard deduction.
The Rhode Island standard deduction shall be allowed inaccordance with the following table:
Filing status Amount
Single $5,350
Married filing jointly or qualifying widow(er) $8,900
Married filing separately $4,450
Head of Household $7,850
(4) Additional standard deduction for the aged and blind.
An additional standard deduction shall be allowed forindividuals age sixty-five (65) or older or blind in the amount of $1,300 forindividuals who are not married and $1,050 for individuals who are married.
(5) Limitation on basic standard deduction in the case ofcertain dependents.
In the case of an individual to whom a deduction undersection (E) is allowable to another taxpayer, the basic standard deductionapplicable to such individual shall not exceed the greater of:
(a) $850;
(b) The sum of $300 and such individual's earned income;
(6) Certain individuals not eligible for standard deduction.
In the case of:
(a) A married individual filing a separate return whereeither spouse itemizes deductions;
(b) Nonresident alien individual;
(c) An estate or trust;
The standard deduction shall be zero.
(7) Adjustments for inflation.
Each dollars amount contained in paragraphs (3), (4) and (5)shall be increased by an amount equal to:
(a) Such dollar amount contained in paragraphs (3), (4) and(5) in the year 1988, multiplied by
(b) The cost-of-living adjustment determined under section(J) with a base year of 1988.
(D) Overall Limitation on Itemized Deductions
(1) General rule.
In the case of an individual whose adjusted gross income asmodified by § 44-30-12 exceeds the applicable amount, the amount of theitemized deductions otherwise allowable for the taxable year shall be reducedby the lesser of:
(a) Three percent (3%) of the excess of adjusted gross incomeas modified by § 44-30-12 over the applicable amount; or
(b) Eighty percent (80%) of the amount of the itemizeddeductions otherwise allowable for such taxable year.
(2) Applicable amount.
(a) In general.
For purposes of this section, the term "applicable amount"means $156,400 ($78,200 in the case of a separate return by a marriedindividual)
(b) Adjustments for inflation.
Each dollar amount contained in paragraph (a) shall beincreased by an amount equal to:
(i) Such dollar amount contained in paragraph (a) in the year1991, multiplied by
(ii) The cost-of-living adjustment determined under section(J) with a base year of 1991.
(3) Phase-out of Limitation.
(a) In general.
In the case of taxable year beginning after December 31,2005, and before January 1, 2010, the reduction under section (1) shall beequal to the applicable fraction of the amount which would be the amount ofsuch reduction.
(b) Applicable fraction.
For purposes of paragraph (a), the applicable fraction shallbe determined in accordance with the following table:
For taxable years beginning in calendar year The applicablefraction is
2006 and 2007 2/3
2008 and 2009 1/3
(E) Exemption Amount
(1) In general.
Except as otherwise provided in this subsection, the term"exemption amount" mean $3,400.
(2) Exemption amount disallowed in case of certain dependents.
In the case of an individual with respect to whom a deductionunder this section is allowable to another taxpayer for the same taxable year,the exemption amount applicable to such individual for such individual'staxable year shall be zero.
(3) Adjustments for inflation.
The dollar amount contained in paragraph (1) shall beincreased by an amount equal to:
(a) Such dollar amount contained in paragraph (1) in the year1989, multiplied by
(b) The cost-of-living adjustment determined under section(J) with a base year of 1989.
(4) Limitation.
(a) In general.
In the case of any taxpayer whose adjusted gross income asmodified for the taxable year exceeds the threshold amount shall be reduced bythe applicable percentage.
(b) Applicable percentage.
In the case of any taxpayer whose adjusted gross income forthe taxable year exceeds the threshold amount, the exemption amount shall bereduced by two (2) percentage points for each $2,500 (or fraction thereof) bywhich the taxpayer's adjusted gross income for the taxable year exceeds thethreshold amount. In the case of a married individual filing a separate return,the preceding sentence shall be applied by substituting "$1,250" for "$2,500."In no event shall the applicable percentage exceed one hundred percent (100%).
(c) Threshold Amount.
For the purposes of this paragraph, the term "thresholdamount" shall be determined with the following table:
Filing status Amount
Single $156,400
Married filing jointly of qualifying widow(er) $234,600
Married filing separately $117,300
Head of Household $195,500
(d) Adjustments for inflation.
Each dollars amount contain in paragraph (b) shall beincreased by an amount equal to:
(i) Such dollar amount contained in paragraph (b) in the year1991, multiplied by
(ii) The cost-of-living adjustment determined under section(J) with a base year of 1991.
(5) Phase-out of Limitation.
(a) In general.
In the case of taxable years beginning after December 31,2005, and before January 1, 2010, the reduction under section 4 shall be equalto the applicable fraction of the amount which would be the amount of suchreduction.
(b) Applicable fraction.
For the purposes of paragraph (a), the applicable fractionshall be determined in accordance with the following table:
For taxable years beginning in calendar year The applicablefraction is
2006 and 2007 2/3
2008 and 2009 1/3
(F) Alternative Minimum Tax
(1) General rule. There is hereby imposed (in additionto any other tax imposed by this subtitle) a tax equal to the excess (if any)of:
(a) The tentative minimum tax for the taxable year, over
(b) The regular tax for the taxable year.
(2) The tentative minimum tax for the taxable year is the sumof:
(a) 6.5 percent of so much of the taxable excess as does notexceed $175,000, plus
(b) 7.0 percent of so much of the taxable excess above$175,000.
(3) The amount determined under the preceding sentence shallbe reduced by the alternative minimum tax foreign tax credit for the taxableyear.
(4) Taxable excess. For the purposes of thissubsection the term "taxable excess" means so much of the federal alternativeminimum taxable income as modified by the modifications in § 44-30-12 asexceeds the exemption amount.
(5) In the case of a married individual filing a separatereturn, subparagraph (2) shall be applied by substituting "$87,500" for$175,000 each place it appears.
(6) Exemption amount.
For purposes of this section "exemption amount" means:
Filing status Amount
Single $39,150
Married filing jointly or qualifying widow(er) $53,700
Married filing separately $26,850
Head of Household $39,150
Estate or trust $24,650
(7) Treatment of unearned income of minor children
(a) In general.
In the case of a minor child, the exemption amount forpurposes of section (6) shall not exceed the sum of:
(i) Such child's earned income, plus
(ii) $6,000.
(8) Adjustments for inflation.
The dollar amount contained in paragraphs (6) and (7) shallbe increased by an amount equal to:
(a) Such dollar amount contained in paragraphs (6) and (7) inthe year 2004, multiplied by
(b) The cost-of-living adjustment determined under section(J) with a base year of 2004.
(9) Phase-out.
(a) In general.
The exemption amount of any taxpayer shall be reduced (butnot below zero) by an amount equal to twenty-five percent (25%) of the amountby which alternative minimum taxable income of the taxpayer exceeds thethreshold amount.
(b) Threshold amount.
For purposes of this paragraph, the term "threshold amount"shall be determined with the following table:
Filing status Amount
Single $123,250
Married filing jointly or qualifying widow(er) $164,350
Married filing separately $82,175
Head of Household $123,250
Estate or Trust $82,150
(c) Adjustments for inflation
Each dollar amount contained in paragraph (9) shall beincreased by an amount equal to:
(i) Such dollar amount contained in paragraph (9) in the year2004, multiplied by
(ii) The cost-of-living adjustment determined under section(J) with a base year of 2004.
(G) Other Rhode Island Taxes
(1) General rule. There is hereby imposed (in additionto any other tax imposed by this subtitle) a tax equal to twenty-five percent(25%) of:
(a) The Federal income tax on lump-sum distributions.
(b) The Federal income tax on parents' election to reportchild's interest and dividends.
(c) The recapture of Federal tax credits that were previouslyclaimed on Rhode Island return.
(H) Tax for children under 18 with investment income
(1) General rule. There is hereby imposed a tax equalto twenty-five percent (25%) of:
(a) The Federal tax for children under the age of 18 withinvestment income.
(I) Averaging of farm income
(1) General rule. At the election of an individualengaged in a farming business or fishing business, the tax imposed in section 2shall be equal to twenty-five percent (25%) of:
(a) The Federal averaging of farm income as determined in IRCsection 1301.
(J) Cost-of-Living Adjustment
(1) In general.
The cost-of-living adjustment for any calendar year is thepercentage (if any) by which:
(a) The CPI for the preceding calendar year exceeds
(b) The CPI for the base year.
(2) CPI for any calendar year.
For purposes of paragraph (1), the CPI for any calendar yearis the average of the Consumer Price Index as of the close of the twelve (12)month period ending on August 31 of such calendar year.
(3) Consumer Price Index
For purposes of paragraph (2), the term "consumer priceindex" means the last consumer price index for all urban consumers published bythe department of labor. For purposes of the preceding sentence, the revisionof the consumer price index which is most consistent with the consumer priceindex for calendar year 1986 shall be used.
(4) Rounding.
(a) In general.
If any increase determined under paragraph (1) is not amultiple of $50, such increase shall be rounded to the next lowest multiple of$50.
(b) In the case of a married individual filing a separatereturn, subparagraph (a) shall be applied by substituting "$25" for $50 eachplace it appears.
(K) Credits against tax. For tax years beginning on orafter January 1, 2001, a taxpayer entitled to any of the following federalcredits enacted prior to January 1, 1996 shall be entitled to a credit againstthe Rhode Island tax imposed under this section:
(1) [Deleted by P.L. 2007, ch. 73, art. 7, §5].
(2) Child and dependent care credit;
(3) General business credits;
(4) Credit for elderly or the disabled;
(5) Credit for prior year minimum tax;
(6) Mortgage interest credit;
(7) Empowerment zone employment credit;
(8) Qualified electric vehicle credit.
(L) Credit Against Tax for Adoption. For tax yearsbeginning on or after January 1, 2006, a taxpayer entitled to the federaladoption credit shall be entitled to a credit against the Rhode Island taximposed under this section if the adopted child was under the care, custody, orsupervision of the Rhode Island department of children, youth and familiesprior to the adoption.
(M) The credit shall be twenty-five percent (25%) of theaforementioned federal credits provided there shall be no deduction based onany federal credits enacted after January 1, 1996, including the rate reductioncredit provided by the federal Economic Growth and Tax Reconciliation Act of2001 (EGTRRA). In no event shall the tax imposed under this section be reducedto less than zero. A taxpayer required to recapture any of the above creditsfor federal tax purposes shall determine the Rhode Island amount to berecaptured in the same manner as prescribed in this subsection.
(N) Rhode Island Earned Income Credit
(1) In general.
A taxpayer entitled to a federal earned income credit shallbe allowed a Rhode Island earned income credit equal to twenty-five percent(25%) of the federal earned income credit. Such credit shall not exceed theamount of the Rhode Island income tax.
(2) Refundable portion.
In the event the Rhode Island earned income credit allowedunder section (J) exceeds the amount of Rhode Island income tax, a refundableearned income credit shall be allowed.
(a) For purposes of paragraph (2) refundable earned incomecredit means fifteen percent (15%) of the amount by which the Rhode Islandearned income credit exceeds the Rhode Island income tax.
(O) The tax administrator shall recalculate and submitnecessary revisions to paragraphs (A) through (J) to the general assembly nolater than February 1, 2010 and every three (3) years thereafter for inclusionin the statute.
§ 44-30-2.6 Rhode Island taxable income– Rate of tax. – (a) "Rhode Island taxable income" means federal taxable income as determinedunder the Internal Revenue Code, 26 U.S.C. § 1 et seq., not including theincrease in the basic standard deduction amount for married couples filingjoint returns as provided in the Jobs and Growth Tax Relief Reconciliation Actof 2003 and the Economic Growth and Tax Relief Reconciliation Act of 2001(EGTRRA), and as modified by the modifications in § 44-30-12.
(b) Notwithstanding the provisions of §§ 44-30-1and 44-30-2, for tax years beginning on or after January 1, 2001, a RhodeIsland personal income tax is imposed upon the Rhode Island taxable income ofresidents and nonresidents, including estates and trusts, at the rate oftwenty-five and one-half percent (25.5%) for tax year 2001, and twenty-fivepercent (25%) for tax year 2002 and thereafter of the federal income tax rates,including capital gains rates and any other special rates for other types ofincome, except as provided in § 44-30-2.7, which were in effectimmediately prior to enactment of the Economic Growth and Tax ReliefReconciliation Act of 2001 (EGTRRA); provided, rate schedules shall be adjustedfor inflation by the tax administrator beginning in taxable year 2002 andthereafter in the manner prescribed for adjustment by the commissioner ofInternal Revenue in 26 U.S.C. § 1(f). However, for tax years beginning onor after January 1, 2006, a taxpayer may elect to use the alternative flat taxrate provided in § 44-30-2.10 to calculate his or her personal income taxliability.
(c) For tax years beginning on or after January 1, 2001, if ataxpayer has an alternative minimum tax for federal tax purposes, the taxpayershall determine if he or she has a Rhode Island alternative minimum tax. TheRhode Island alternative minimum tax shall be computed by multiplying thefederal tentative minimum tax without allowing for the increased exemptionsunder the Jobs and Growth Tax Relief Reconciliation Act of 2003 (asredetermined on federal form 6251 Alternative Minimum Tax-Individuals) bytwenty-five and one-half percent (25.5%) for tax year 2001, and twenty-fivepercent (25%) for tax year 2002 and thereafter, and comparing the product tothe Rhode Island tax as computed otherwise under this section. The excess shallbe the taxpayer's Rhode Island alternative minimum tax.
(1) For tax years beginning on or after January 1, 2005 andthereafter the exemption amount for alternative minimum tax, for Rhode Islandpurposes, shall be adjusted for inflation by the tax administrator in themanner prescribed for adjustment by the commissioner of Internal Revenue in 26U.S.C. § 1(f).
(2) For the period January 1, 2007 through December 31, 2007,and thereafter, Rhode Island taxable income shall be determined by deductingfrom federal adjusted gross income as defined in 26 U.S.C. § 62 asmodified by the modifications in § 44-30-12 the Rhode Island itemizeddeduction amount and the Rhode Island exemption amount as determined in thissection.
(A) Tax imposed.
(1) There is hereby imposed on the taxable income of marriedindividuals filing joint returns and surviving spouses a tax determined inaccordance with the following table:
SEE THE BOOK FOR THE PROPER TABLE.
(2) There is hereby imposed on the taxable income of everyhead of household a tax determined in accordance with the following table:
SEE THE BOOK FOR THE PROPER TABLE.
(3) There is hereby imposed on the taxable income ofunmarried individuals (other than surviving spouses and heads of households) atax determined in accordance with the following table:
SEE THE BOOK FOR THE PROPER TABLE.
(4) There is hereby imposed on the taxable income of marriedindividuals filing separate returns and bankruptcy estates a tax determined inaccordance with the following table:
SEE THE BOOK FOR THE PROPER TABLE.
(5) There is hereby imposed a taxable income of an estate ortrust a tax determined in accordance with the following table:
SEE THE BOOK FOR THE PROPER TABLE.
(6) Adjustments for inflation.
The dollars amount contained in paragraph (A) shall beincreased by an amount equal to:
(a) Such dollar amount contained in paragraph (A) in the year1993, multiplied by;
(b) The cost-of-living adjustment determined under section(J) with a base year of 1993;
(c) The cost-of-living adjustment referred to in subparagraph(a) and (b) used in making adjustments to the nine percent (9%) and nine andnine tenths percent (9.9%) dollar amounts shall be determined under section (J)by substituting "1994" for "1993."
(B) Maximum capital gains rates
(1) In general
If a taxpayer has a net capital gain for tax years endingprior to January 1, 2010, the tax imposed by this section for such taxable yearshall not exceed the sum of:
(a) 2.5 % of the net capital gain as reported for federalincome tax purposes under section 26 U.S.C. 1(h)(1)(a) and 26 U.S.C. 1(h)(1)(b).
(b) 5% of the net capital gain as reported for federal incometax purposes under 26 U.S.C. 1(h)(1)(c).
(c) 6.25% of the net capital gain as reported for federalincome tax purposes under 26 U.S.C. 1(h)(1)(d).
(d) 7% of the net capital gain as reported for federal incometax purposes under 26 U.S.C. 1(h)(1)(e).
(2) For tax years beginning on or after January 1, 2010 thetax imposed on net capital gain shall be determined under subdivision44-30-2.6(c)(2)(A).
(C) Itemized deductions.
(1) In general
For the purposes of section (2) "itemized deductions" meansthe amount of federal itemized deductions as modified by the modifications in§ 44-30-12.
(2) Individuals who do not itemize their deductions
In the case of an individual who does not elect to itemizehis deductions for the taxable year, they may elect to take a standarddeduction.
(3) Basic standard deduction.
The Rhode Island standard deduction shall be allowed inaccordance with the following table:
Filing status Amount
Single $5,350
Married filing jointly or qualifying widow(er) $8,900
Married filing separately $4,450
Head of Household $7,850
(4) Additional standard deduction for the aged and blind.
An additional standard deduction shall be allowed forindividuals age sixty-five (65) or older or blind in the amount of $1,300 forindividuals who are not married and $1,050 for individuals who are married.
(5) Limitation on basic standard deduction in the case ofcertain dependents.
In the case of an individual to whom a deduction undersection (E) is allowable to another taxpayer, the basic standard deductionapplicable to such individual shall not exceed the greater of:
(a) $850;
(b) The sum of $300 and such individual's earned income;
(6) Certain individuals not eligible for standard deduction.
In the case of:
(a) A married individual filing a separate return whereeither spouse itemizes deductions;
(b) Nonresident alien individual;
(c) An estate or trust;
The standard deduction shall be zero.
(7) Adjustments for inflation.
Each dollars amount contained in paragraphs (3), (4) and (5)shall be increased by an amount equal to:
(a) Such dollar amount contained in paragraphs (3), (4) and(5) in the year 1988, multiplied by
(b) The cost-of-living adjustment determined under section(J) with a base year of 1988.
(D) Overall Limitation on Itemized Deductions
(1) General rule.
In the case of an individual whose adjusted gross income asmodified by § 44-30-12 exceeds the applicable amount, the amount of theitemized deductions otherwise allowable for the taxable year shall be reducedby the lesser of:
(a) Three percent (3%) of the excess of adjusted gross incomeas modified by § 44-30-12 over the applicable amount; or
(b) Eighty percent (80%) of the amount of the itemizeddeductions otherwise allowable for such taxable year.
(2) Applicable amount.
(a) In general.
For purposes of this section, the term "applicable amount"means $156,400 ($78,200 in the case of a separate return by a marriedindividual)
(b) Adjustments for inflation.
Each dollar amount contained in paragraph (a) shall beincreased by an amount equal to:
(i) Such dollar amount contained in paragraph (a) in the year1991, multiplied by
(ii) The cost-of-living adjustment determined under section(J) with a base year of 1991.
(3) Phase-out of Limitation.
(a) In general.
In the case of taxable year beginning after December 31,2005, and before January 1, 2010, the reduction under section (1) shall beequal to the applicable fraction of the amount which would be the amount ofsuch reduction.
(b) Applicable fraction.
For purposes of paragraph (a), the applicable fraction shallbe determined in accordance with the following table:
For taxable years beginning in calendar year The applicablefraction is
2006 and 2007 2/3
2008 and 2009 1/3
(E) Exemption Amount
(1) In general.
Except as otherwise provided in this subsection, the term"exemption amount" mean $3,400.
(2) Exemption amount disallowed in case of certain dependents.
In the case of an individual with respect to whom a deductionunder this section is allowable to another taxpayer for the same taxable year,the exemption amount applicable to such individual for such individual'staxable year shall be zero.
(3) Adjustments for inflation.
The dollar amount contained in paragraph (1) shall beincreased by an amount equal to:
(a) Such dollar amount contained in paragraph (1) in the year1989, multiplied by
(b) The cost-of-living adjustment determined under section(J) with a base year of 1989.
(4) Limitation.
(a) In general.
In the case of any taxpayer whose adjusted gross income asmodified for the taxable year exceeds the threshold amount shall be reduced bythe applicable percentage.
(b) Applicable percentage.
In the case of any taxpayer whose adjusted gross income forthe taxable year exceeds the threshold amount, the exemption amount shall bereduced by two (2) percentage points for each $2,500 (or fraction thereof) bywhich the taxpayer's adjusted gross income for the taxable year exceeds thethreshold amount. In the case of a married individual filing a separate return,the preceding sentence shall be applied by substituting "$1,250" for "$2,500."In no event shall the applicable percentage exceed one hundred percent (100%).
(c) Threshold Amount.
For the purposes of this paragraph, the term "thresholdamount" shall be determined with the following table:
Filing status Amount
Single $156,400
Married filing jointly of qualifying widow(er) $234,600
Married filing separately $117,300
Head of Household $195,500
(d) Adjustments for inflation.
Each dollars amount contain in paragraph (b) shall beincreased by an amount equal to:
(i) Such dollar amount contained in paragraph (b) in the year1991, multiplied by
(ii) The cost-of-living adjustment determined under section(J) with a base year of 1991.
(5) Phase-out of Limitation.
(a) In general.
In the case of taxable years beginning after December 31,2005, and before January 1, 2010, the reduction under section 4 shall be equalto the applicable fraction of the amount which would be the amount of suchreduction.
(b) Applicable fraction.
For the purposes of paragraph (a), the applicable fractionshall be determined in accordance with the following table:
For taxable years beginning in calendar year The applicablefraction is
2006 and 2007 2/3
2008 and 2009 1/3
(F) Alternative Minimum Tax
(1) General rule. There is hereby imposed (in additionto any other tax imposed by this subtitle) a tax equal to the excess (if any)of:
(a) The tentative minimum tax for the taxable year, over
(b) The regular tax for the taxable year.
(2) The tentative minimum tax for the taxable year is the sumof:
(a) 6.5 percent of so much of the taxable excess as does notexceed $175,000, plus
(b) 7.0 percent of so much of the taxable excess above$175,000.
(3) The amount determined under the preceding sentence shallbe reduced by the alternative minimum tax foreign tax credit for the taxableyear.
(4) Taxable excess. For the purposes of thissubsection the term "taxable excess" means so much of the federal alternativeminimum taxable income as modified by the modifications in § 44-30-12 asexceeds the exemption amount.
(5) In the case of a married individual filing a separatereturn, subparagraph (2) shall be applied by substituting "$87,500" for$175,000 each place it appears.
(6) Exemption amount.
For purposes of this section "exemption amount" means:
Filing status Amount
Single $39,150
Married filing jointly or qualifying widow(er) $53,700
Married filing separately $26,850
Head of Household $39,150
Estate or trust $24,650
(7) Treatment of unearned income of minor children
(a) In general.
In the case of a minor child, the exemption amount forpurposes of section (6) shall not exceed the sum of:
(i) Such child's earned income, plus
(ii) $6,000.
(8) Adjustments for inflation.
The dollar amount contained in paragraphs (6) and (7) shallbe increased by an amount equal to:
(a) Such dollar amount contained in paragraphs (6) and (7) inthe year 2004, multiplied by
(b) The cost-of-living adjustment determined under section(J) with a base year of 2004.
(9) Phase-out.
(a) In general.
The exemption amount of any taxpayer shall be reduced (butnot below zero) by an amount equal to twenty-five percent (25%) of the amountby which alternative minimum taxable income of the taxpayer exceeds thethreshold amount.
(b) Threshold amount.
For purposes of this paragraph, the term "threshold amount"shall be determined with the following table:
Filing status Amount
Single $123,250
Married filing jointly or qualifying widow(er) $164,350
Married filing separately $82,175
Head of Household $123,250
Estate or Trust $82,150
(c) Adjustments for inflation
Each dollar amount contained in paragraph (9) shall beincreased by an amount equal to:
(i) Such dollar amount contained in paragraph (9) in the year2004, multiplied by
(ii) The cost-of-living adjustment determined under section(J) with a base year of 2004.
(G) Other Rhode Island Taxes
(1) General rule. There is hereby imposed (in additionto any other tax imposed by this subtitle) a tax equal to twenty-five percent(25%) of:
(a) The Federal income tax on lump-sum distributions.
(b) The Federal income tax on parents' election to reportchild's interest and dividends.
(c) The recapture of Federal tax credits that were previouslyclaimed on Rhode Island return.
(H) Tax for children under 18 with investment income
(1) General rule. There is hereby imposed a tax equalto twenty-five percent (25%) of:
(a) The Federal tax for children under the age of 18 withinvestment income.
(I) Averaging of farm income
(1) General rule. At the election of an individualengaged in a farming business or fishing business, the tax imposed in section 2shall be equal to twenty-five percent (25%) of:
(a) The Federal averaging of farm income as determined in IRCsection 1301.
(J) Cost-of-Living Adjustment
(1) In general.
The cost-of-living adjustment for any calendar year is thepercentage (if any) by which:
(a) The CPI for the preceding calendar year exceeds
(b) The CPI for the base year.
(2) CPI for any calendar year.
For purposes of paragraph (1), the CPI for any calendar yearis the average of the Consumer Price Index as of the close of the twelve (12)month period ending on August 31 of such calendar year.
(3) Consumer Price Index
For purposes of paragraph (2), the term "consumer priceindex" means the last consumer price index for all urban consumers published bythe department of labor. For purposes of the preceding sentence, the revisionof the consumer price index which is most consistent with the consumer priceindex for calendar year 1986 shall be used.
(4) Rounding.
(a) In general.
If any increase determined under paragraph (1) is not amultiple of $50, such increase shall be rounded to the next lowest multiple of$50.
(b) In the case of a married individual filing a separatereturn, subparagraph (a) shall be applied by substituting "$25" for $50 eachplace it appears.
(K) Credits against tax. For tax years beginning on orafter January 1, 2001, a taxpayer entitled to any of the following federalcredits enacted prior to January 1, 1996 shall be entitled to a credit againstthe Rhode Island tax imposed under this section:
(1) [Deleted by P.L. 2007, ch. 73, art. 7, §5].
(2) Child and dependent care credit;
(3) General business credits;
(4) Credit for elderly or the disabled;
(5) Credit for prior year minimum tax;
(6) Mortgage interest credit;
(7) Empowerment zone employment credit;
(8) Qualified electric vehicle credit.
(L) Credit Against Tax for Adoption. For tax yearsbeginning on or after January 1, 2006, a taxpayer entitled to the federaladoption credit shall be entitled to a credit against the Rhode Island taximposed under this section if the adopted child was under the care, custody, orsupervision of the Rhode Island department of children, youth and familiesprior to the adoption.
(M) The credit shall be twenty-five percent (25%) of theaforementioned federal credits provided there shall be no deduction based onany federal credits enacted after January 1, 1996, including the rate reductioncredit provided by the federal Economic Growth and Tax Reconciliation Act of2001 (EGTRRA). In no event shall the tax imposed under this section be reducedto less than zero. A taxpayer required to recapture any of the above creditsfor federal tax purposes shall determine the Rhode Island amount to berecaptured in the same manner as prescribed in this subsection.
(N) Rhode Island Earned Income Credit
(1) In general.
A taxpayer entitled to a federal earned income credit shallbe allowed a Rhode Island earned income credit equal to twenty-five percent(25%) of the federal earned income credit. Such credit shall not exceed theamount of the Rhode Island income tax.
(2) Refundable portion.
In the event the Rhode Island earned income credit allowedunder section (J) exceeds the amount of Rhode Island income tax, a refundableearned income credit shall be allowed.
(a) For purposes of paragraph (2) refundable earned incomecredit means fifteen percent (15%) of the amount by which the Rhode Islandearned income credit exceeds the Rhode Island income tax.
(O) The tax administrator shall recalculate and submitnecessary revisions to paragraphs (A) through (J) to the general assembly nolater than February 1, 2010 and every three (3) years thereafter for inclusionin the statute.
§ 44-30-2.6 Rhode Island taxable income– Rate of tax. – (a) "Rhode Island taxable income" means federal taxable income as determinedunder the Internal Revenue Code, 26 U.S.C. § 1 et seq., not including theincrease in the basic standard deduction amount for married couples filingjoint returns as provided in the Jobs and Growth Tax Relief Reconciliation Actof 2003 and the Economic Growth and Tax Relief Reconciliation Act of 2001(EGTRRA), and as modified by the modifications in § 44-30-12.
(b) Notwithstanding the provisions of §§ 44-30-1and 44-30-2, for tax years beginning on or after January 1, 2001, a RhodeIsland personal income tax is imposed upon the Rhode Island taxable income ofresidents and nonresidents, including estates and trusts, at the rate oftwenty-five and one-half percent (25.5%) for tax year 2001, and twenty-fivepercent (25%) for tax year 2002 and thereafter of the federal income tax rates,including capital gains rates and any other special rates for other types ofincome, except as provided in § 44-30-2.7, which were in effectimmediately prior to enactment of the Economic Growth and Tax ReliefReconciliation Act of 2001 (EGTRRA); provided, rate schedules shall be adjustedfor inflation by the tax administrator beginning in taxable year 2002 andthereafter in the manner prescribed for adjustment by the commissioner ofInternal Revenue in 26 U.S.C. § 1(f). However, for tax years beginning onor after January 1, 2006, a taxpayer may elect to use the alternative flat taxrate provided in § 44-30-2.10 to calculate his or her personal income taxliability.
(c) For tax years beginning on or after January 1, 2001, if ataxpayer has an alternative minimum tax for federal tax purposes, the taxpayershall determine if he or she has a Rhode Island alternative minimum tax. TheRhode Island alternative minimum tax shall be computed by multiplying thefederal tentative minimum tax without allowing for the increased exemptionsunder the Jobs and Growth Tax Relief Reconciliation Act of 2003 (asredetermined on federal form 6251 Alternative Minimum Tax-Individuals) bytwenty-five and one-half percent (25.5%) for tax year 2001, and twenty-fivepercent (25%) for tax year 2002 and thereafter, and comparing the product tothe Rhode Island tax as computed otherwise under this section. The excess shallbe the taxpayer's Rhode Island alternative minimum tax.
(1) For tax years beginning on or after January 1, 2005 andthereafter the exemption amount for alternative minimum tax, for Rhode Islandpurposes, shall be adjusted for inflation by the tax administrator in themanner prescribed for adjustment by the commissioner of Internal Revenue in 26U.S.C. § 1(f).
(2) For the period January 1, 2007 through December 31, 2007,and thereafter, Rhode Island taxable income shall be determined by deductingfrom federal adjusted gross income as defined in 26 U.S.C. § 62 asmodified by the modifications in § 44-30-12 the Rhode Island itemizeddeduction amount and the Rhode Island exemption amount as determined in thissection.
(A) Tax imposed.
(1) There is hereby imposed on the taxable income of marriedindividuals filing joint returns and surviving spouses a tax determined inaccordance with the following table:
SEE THE BOOK FOR THE PROPER TABLE.
(2) There is hereby imposed on the taxable income of everyhead of household a tax determined in accordance with the following table:
SEE THE BOOK FOR THE PROPER TABLE.
(3) There is hereby imposed on the taxable income ofunmarried individuals (other than surviving spouses and heads of households) atax determined in accordance with the following table:
SEE THE BOOK FOR THE PROPER TABLE.
(4) There is hereby imposed on the taxable income of marriedindividuals filing separate returns and bankruptcy estates a tax determined inaccordance with the following table:
SEE THE BOOK FOR THE PROPER TABLE.
(5) There is hereby imposed a taxable income of an estate ortrust a tax determined in accordance with the following table:
SEE THE BOOK FOR THE PROPER TABLE.
(6) Adjustments for inflation.
The dollars amount contained in paragraph (A) shall beincreased by an amount equal to:
(a) Such dollar amount contained in paragraph (A) in the year1993, multiplied by;
(b) The cost-of-living adjustment determined under section(J) with a base year of 1993;
(c) The cost-of-living adjustment referred to in subparagraph(a) and (b) used in making adjustments to the nine percent (9%) and nine andnine tenths percent (9.9%) dollar amounts shall be determined under section (J)by substituting "1994" for "1993."
(B) Maximum capital gains rates
(1) In general
If a taxpayer has a net capital gain for tax years endingprior to January 1, 2010, the tax imposed by this section for such taxable yearshall not exceed the sum of:
(a) 2.5 % of the net capital gain as reported for federalincome tax purposes under section 26 U.S.C. 1(h)(1)(a) and 26 U.S.C. 1(h)(1)(b).
(b) 5% of the net capital gain as reported for federal incometax purposes under 26 U.S.C. 1(h)(1)(c).
(c) 6.25% of the net capital gain as reported for federalincome tax purposes under 26 U.S.C. 1(h)(1)(d).
(d) 7% of the net capital gain as reported for federal incometax purposes under 26 U.S.C. 1(h)(1)(e).
(2) For tax years beginning on or after January 1, 2010 thetax imposed on net capital gain shall be determined under subdivision44-30-2.6(c)(2)(A).
(C) Itemized deductions.
(1) In general
For the purposes of section (2) "itemized deductions" meansthe amount of federal itemized deductions as modified by the modifications in§ 44-30-12.
(2) Individuals who do not itemize their deductions
In the case of an individual who does not elect to itemizehis deductions for the taxable year, they may elect to take a standarddeduction.
(3) Basic standard deduction.
The Rhode Island standard deduction shall be allowed inaccordance with the following table:
Filing status Amount
Single $5,350
Married filing jointly or qualifying widow(er) $8,900
Married filing separately $4,450
Head of Household $7,850
(4) Additional standard deduction for the aged and blind.
An additional standard deduction shall be allowed forindividuals age sixty-five (65) or older or blind in the amount of $1,300 forindividuals who are not married and $1,050 for individuals who are married.
(5) Limitation on basic standard deduction in the case ofcertain dependents.
In the case of an individual to whom a deduction undersection (E) is allowable to another taxpayer, the basic standard deductionapplicable to such individual shall not exceed the greater of:
(a) $850;
(b) The sum of $300 and such individual's earned income;
(6) Certain individuals not eligible for standard deduction.
In the case of:
(a) A married individual filing a separate return whereeither spouse itemizes deductions;
(b) Nonresident alien individual;
(c) An estate or trust;
The standard deduction shall be zero.
(7) Adjustments for inflation.
Each dollars amount contained in paragraphs (3), (4) and (5)shall be increased by an amount equal to:
(a) Such dollar amount contained in paragraphs (3), (4) and(5) in the year 1988, multiplied by
(b) The cost-of-living adjustment determined under section(J) with a base year of 1988.
(D) Overall Limitation on Itemized Deductions
(1) General rule.
In the case of an individual whose adjusted gross income asmodified by § 44-30-12 exceeds the applicable amount, the amount of theitemized deductions otherwise allowable for the taxable year shall be reducedby the lesser of:
(a) Three percent (3%) of the excess of adjusted gross incomeas modified by § 44-30-12 over the applicable amount; or
(b) Eighty percent (80%) of the amount of the itemizeddeductions otherwise allowable for such taxable year.
(2) Applicable amount.
(a) In general.
For purposes of this section, the term "applicable amount"means $156,400 ($78,200 in the case of a separate return by a marriedindividual)
(b) Adjustments for inflation.
Each dollar amount contained in paragraph (a) shall beincreased by an amount equal to:
(i) Such dollar amount contained in paragraph (a) in the year1991, multiplied by
(ii) The cost-of-living adjustment determined under section(J) with a base year of 1991.
(3) Phase-out of Limitation.
(a) In general.
In the case of taxable year beginning after December 31,2005, and before January 1, 2010, the reduction under section (1) shall beequal to the applicable fraction of the amount which would be the amount ofsuch reduction.
(b) Applicable fraction.
For purposes of paragraph (a), the applicable fraction shallbe determined in accordance with the following table:
For taxable years beginning in calendar year The applicablefraction is
2006 and 2007 2/3
2008 and 2009 1/3
(E) Exemption Amount
(1) In general.
Except as otherwise provided in this subsection, the term"exemption amount" mean $3,400.
(2) Exemption amount disallowed in case of certain dependents.
In the case of an individual with respect to whom a deductionunder this section is allowable to another taxpayer for the same taxable year,the exemption amount applicable to such individual for such individual'staxable year shall be zero.
(3) Adjustments for inflation.
The dollar amount contained in paragraph (1) shall beincreased by an amount equal to:
(a) Such dollar amount contained in paragraph (1) in the year1989, multiplied by
(b) The cost-of-living adjustment determined under section(J) with a base year of 1989.
(4) Limitation.
(a) In general.
In the case of any taxpayer whose adjusted gross income asmodified for the taxable year exceeds the threshold amount shall be reduced bythe applicable percentage.
(b) Applicable percentage.
In the case of any taxpayer whose adjusted gross income forthe taxable year exceeds the threshold amount, the exemption amount shall bereduced by two (2) percentage points for each $2,500 (or fraction thereof) bywhich the taxpayer's adjusted gross income for the taxable year exceeds thethreshold amount. In the case of a married individual filing a separate return,the preceding sentence shall be applied by substituting "$1,250" for "$2,500."In no event shall the applicable percentage exceed one hundred percent (100%).
(c) Threshold Amount.
For the purposes of this paragraph, the term "thresholdamount" shall be determined with the following table:
Filing status Amount
Single $156,400
Married filing jointly of qualifying widow(er) $234,600
Married filing separately $117,300
Head of Household $195,500
(d) Adjustments for inflation.
Each dollars amount contain in paragraph (b) shall beincreased by an amount equal to:
(i) Such dollar amount contained in paragraph (b) in the year1991, multiplied by
(ii) The cost-of-living adjustment determined under section(J) with a base year of 1991.
(5) Phase-out of Limitation.
(a) In general.
In the case of taxable years beginning after December 31,2005, and before January 1, 2010, the reduction under section 4 shall be equalto the applicable fraction of the amount which would be the amount of suchreduction.
(b) Applicable fraction.
For the purposes of paragraph (a), the applicable fractionshall be determined in accordance with the following table:
For taxable years beginning in calendar year The applicablefraction is
2006 and 2007 2/3
2008 and 2009 1/3
(F) Alternative Minimum Tax
(1) General rule. There is hereby imposed (in additionto any other tax imposed by this subtitle) a tax equal to the excess (if any)of:
(a) The tentative minimum tax for the taxable year, over
(b) The regular tax for the taxable year.
(2) The tentative minimum tax for the taxable year is the sumof:
(a) 6.5 percent of so much of the taxable excess as does notexceed $175,000, plus
(b) 7.0 percent of so much of the taxable excess above$175,000.
(3) The amount determined under the preceding sentence shallbe reduced by the alternative minimum tax foreign tax credit for the taxableyear.
(4) Taxable excess. For the purposes of thissubsection the term "taxable excess" means so much of the federal alternativeminimum taxable income as modified by the modifications in § 44-30-12 asexceeds the exemption amount.
(5) In the case of a married individual filing a separatereturn, subparagraph (2) shall be applied by substituting "$87,500" for$175,000 each place it appears.
(6) Exemption amount.
For purposes of this section "exemption amount" means:
Filing status Amount
Single $39,150
Married filing jointly or qualifying widow(er) $53,700
Married filing separately $26,850
Head of Household $39,150
Estate or trust $24,650
(7) Treatment of unearned income of minor children
(a) In general.
In the case of a minor child, the exemption amount forpurposes of section (6) shall not exceed the sum of:
(i) Such child's earned income, plus
(ii) $6,000.
(8) Adjustments for inflation.
The dollar amount contained in paragraphs (6) and (7) shallbe increased by an amount equal to:
(a) Such dollar amount contained in paragraphs (6) and (7) inthe year 2004, multiplied by
(b) The cost-of-living adjustment determined under section(J) with a base year of 2004.
(9) Phase-out.
(a) In general.
The exemption amount of any taxpayer shall be reduced (butnot below zero) by an amount equal to twenty-five percent (25%) of the amountby which alternative minimum taxable income of the taxpayer exceeds thethreshold amount.
(b) Threshold amount.
For purposes of this paragraph, the term "threshold amount"shall be determined with the following table:
Filing status Amount
Single $123,250
Married filing jointly or qualifying widow(er) $164,350
Married filing separately $82,175
Head of Household $123,250
Estate or Trust $82,150
(c) Adjustments for inflation
Each dollar amount contained in paragraph (9) shall beincreased by an amount equal to:
(i) Such dollar amount contained in paragraph (9) in the year2004, multiplied by
(ii) The cost-of-living adjustment determined under section(J) with a base year of 2004.
(G) Other Rhode Island Taxes
(1) General rule. There is hereby imposed (in additionto any other tax imposed by this subtitle) a tax equal to twenty-five percent(25%) of:
(a) The Federal income tax on lump-sum distributions.
(b) The Federal income tax on parents' election to reportchild's interest and dividends.
(c) The recapture of Federal tax credits that were previouslyclaimed on Rhode Island return.
(H) Tax for children under 18 with investment income
(1) General rule. There is hereby imposed a tax equalto twenty-five percent (25%) of:
(a) The Federal tax for children under the age of 18 withinvestment income.
(I) Averaging of farm income
(1) General rule. At the election of an individualengaged in a farming business or fishing business, the tax imposed in section 2shall be equal to twenty-five percent (25%) of:
(a) The Federal averaging of farm income as determined in IRCsection 1301.
(J) Cost-of-Living Adjustment
(1) In general.
The cost-of-living adjustment for any calendar year is thepercentage (if any) by which:
(a) The CPI for the preceding calendar year exceeds
(b) The CPI for the base year.
(2) CPI for any calendar year.
For purposes of paragraph (1), the CPI for any calendar yearis the average of the Consumer Price Index as of the close of the twelve (12)month period ending on August 31 of such calendar year.
(3) Consumer Price Index
For purposes of paragraph (2), the term "consumer priceindex" means the last consumer price index for all urban consumers published bythe department of labor. For purposes of the preceding sentence, the revisionof the consumer price index which is most consistent with the consumer priceindex for calendar year 1986 shall be used.
(4) Rounding.
(a) In general.
If any increase determined under paragraph (1) is not amultiple of $50, such increase shall be rounded to the next lowest multiple of$50.
(b) In the case of a married individual filing a separatereturn, subparagraph (a) shall be applied by substituting "$25" for $50 eachplace it appears.
(K) Credits against tax. For tax years beginning on orafter January 1, 2001, a taxpayer entitled to any of the following federalcredits enacted prior to January 1, 1996 shall be entitled to a credit againstthe Rhode Island tax imposed under this section:
(1) [Deleted by P.L. 2007, ch. 73, art. 7, §5].
(2) Child and dependent care credit;
(3) General business credits;
(4) Credit for elderly or the disabled;
(5) Credit for prior year minimum tax;
(6) Mortgage interest credit;
(7) Empowerment zone employment credit;
(8) Qualified electric vehicle credit.
(L) Credit Against Tax for Adoption. For tax yearsbeginning on or after January 1, 2006, a taxpayer entitled to the federaladoption credit shall be entitled to a credit against the Rhode Island taximposed under this section if the adopted child was under the care, custody, orsupervision of the Rhode Island department of children, youth and familiesprior to the adoption.
(M) The credit shall be twenty-five percent (25%) of theaforementioned federal credits provided there shall be no deduction based onany federal credits enacted after January 1, 1996, including the rate reductioncredit provided by the federal Economic Growth and Tax Reconciliation Act of2001 (EGTRRA). In no event shall the tax imposed under this section be reducedto less than zero. A taxpayer required to recapture any of the above creditsfor federal tax purposes shall determine the Rhode Island amount to berecaptured in the same manner as prescribed in this subsection.
(N) Rhode Island Earned Income Credit
(1) In general.
A taxpayer entitled to a federal earned income credit shallbe allowed a Rhode Island earned income credit equal to twenty-five percent(25%) of the federal earned income credit. Such credit shall not exceed theamount of the Rhode Island income tax.
(2) Refundable portion.
In the event the Rhode Island earned income credit allowedunder section (J) exceeds the amount of Rhode Island income tax, a refundableearned income credit shall be allowed.
(a) For purposes of paragraph (2) refundable earned incomecredit means fifteen percent (15%) of the amount by which the Rhode Islandearned income credit exceeds the Rhode Island income tax.
(O) The tax administrator shall recalculate and submitnecessary revisions to paragraphs (A) through (J) to the general assembly nolater than February 1, 2010 and every three (3) years thereafter for inclusionin the statute.
