Modifications Decreasing Federal AGI:
Income from obligations of the United States Government to the extent included in adjusted gross income for federal tax purposes but exempt for state purposes. However, this amount shall be reduced by any investment interest incurred or continued on the obligation which has been taken as a federal itemized deduction. Example – US Government Series E bond interest. Taxpayers claiming these modifications must submit a schedule showing the source and amount of income claimed to be exempt. RIGL§44- 30-12(c)(1)
Rhode Island fiduciary adjustment under RIGL §44-30-17. A fiduciary adjustment is allowed for a beneficiary for income that maintains its character as it flows from the fiduciary. For example, if the estate or trust has tax exempt interest, the beneficiary would be allowed an adjustment for the tax exempt interest and would list that fiduciary adjustment on this line.
Elective deduction for new research and development facilities under RIGL §44-32-1.
Under the Federal 1974 Railroad Retirement Act, the entire amount of Railroad Retirement benefits included in gross income for federal income tax purposes are exempt from state income taxes.
Qualifying investment in a certified venture capital partnership under RIGL §44-43-2.
Family Education Accounts under RIGL §44-30-25(f).
Tuition Saving Program (section 529 accounts) RIGL §44-30- 12(c)(4) - 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. (See General Instructions on pg I-3 for more details).
Exemptions from tax on profit or gain for writers, composers and artists residing within a section of the defined Economic Development Zoneas 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 thesource 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 - RIGL §44-61-1. (See General Instructions on page I-2 for more details)
Depreciation that has not been taken for federal purposes because of the increased section 179 depreciation was not taken originally – RIGL §44-61-1.1. (See General Instructions on page I-3 for more details).
Allowable modification for performance based compensation realized by an eligible employee under the Rhode Island Jobs Growth Act under RIGL §42-64.11-4.
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.
Modification for Tax Incentives for Employers under RIGL §44- 55-4.1. Attach Form RI-107.
Tax credit income claimed on Federal return exempt for Rhode Island purposes: Historic Structures - Tax Credit income under RIGL §44- 33.2-3(e)(2), Historic Preservation Tax Credits 2013 income under RIGL §44- 31.2-9(c), Motion Picture Production Company Tax Credit income, Musical and Theatrical Production Tax Credit income under RIGL §44-31.3-2(b)(6), and Stay Invested in RI Wavemaker Fellowship under RIGL §42-64.26.
Active duty military pay of Nonresidents stationed in Rhode Island, as well as the income of their nonresident spouses for services performed in Rhode Island. Income for services performed by the servicemember’s spouse in Rhode Island would be exempt from Rhode Island income tax only if the servicemember’s spouse moves to Rhode Island solely to be with the servicemember complying with military orders sending him/her to Rhode Island. The servicemember and the servicemember’s spouse must also share the same non-Rhode Island domicile.
Not all income earned by the servicemember or his/her spouse is exempt from Rhode Island income tax. Non-military pay of the servicemember, as well as business income, gambling winnings or income from the ownership or disposition of real or tangible property earned from Rhode Island by either the servicemember or his/her spouse is still subject to Rhode Island income tax.
Note: The military servicemember and/or his/her spouse may be asked to submit proof of residency to support taking this modification.
Contributions to a Scituate Medical Savings Account deemed taxable under the Internal Revenue Code, but tax exempt under RIGL §44-30- 25.1(d)(1).
Amounts of insurance benefits for dependents and domestic partners included in Federal adjusted gross income pursuant to chapter 12 under title 36 under §44-30-12(c)(6).
Rhode Island full-year residents only. Up to $10,000 in unreimbursed expenses for travel, lodging and lost wages incurred by an individual as a result of the individual donating one or more of his/her organs to another human being for organ transplantation under RIGL §44-30-12(c)(7). Modification can only be taken once during the lifetime of the individual and is taken in the year that the human organ transplantation occurs.
Under RIGL §42-64.3-7 a domiciliary of an enterprise zone who owns and operates a qualified business facility in that zone may, for the first three years after certification, reduce federal AGI by $50,000 per year and may, for the fourth and fifth years, reduce federal AGI by $25,000 per year.
Income from the discharge of business indebtedness deferred under the American Recovery and Reinvestment Act of 2009 under §44-66-1. When claimed as income on a federal tax return, this income may be reported as a decreasing modification to federal adjusted gross income to the extent it was previously included as Rhode Island income.
Taxable Social Security income under RIGL §44-30-12(c)(8). Use the Social Security Modification worksheet on page 16 of the RI-1040 Resident booklet to determine the amount of taxable social security income allowed as a decreasing modification. Enter your date of birth, and if applicable, your spouse’s date of birth, in the space provided on line 1u.
Modification up to $15,000 for taxable retirement income from certain pension plans or annuities under R.I. Gen. Laws §44-30-12(c)(9). If you answer YES to the following two questions, complete the table below to determine how much taxable pension income you can deduct.
Modifications INCREASING Federal AGI:
Income from obligations of any state or its political subdivision, other than Rhode Island under RIGL §44-30-12(b)(1) and §44-30-12(b)(2).
Rhode Island fiduciary adjustment under RIGL §44-30-17. A fiduciary adjustment would be required for a beneficiary for income that maintains its character as it flows from the fiduciary. For example, if the estate or trust has municipal bond interest from a state other than Rhode Island, the beneficiary would be allowed an adjustment for that municipal bond interest and would list that fiduciary adjustment on this line.
Recapture of Family Education Account Modifications under RIGL §44-30-25(g).
Bonus depreciation that has been taken for federal purposes that must be added back to Rhode Island income under RIGL §44-61-1 (See General Instructions on page I-2 for more details).
Recapture of Tuition Savings Program modifications (section 529 accounts) under RIGL §44-30-12(b)(4) (See General Instructions on page I-3 for more details).
Recapture of tax credit income previously claimed as a modification decreasing Federal AGI for Historic Structures - Tax Credit, Historic Preservation Tax Credits 2013, Motion Picture Production Tax Credit or Musical and Theatrical Production Tax Credit under RIGL §44-33.2-3(e)(2), RIGL §44-33.2-3(f), RIGL §44-31.2-9(5) and §44-31.3-2, respectively.
Recapture of Scituate Medical Savings Account modifications under RIGL §44-30-25.1(d)(3)(i).