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) - The maximum modification shall not exceed $500, $1,000 if a joint return.
- Exemptions from a tax on profit or gain for writers.
- Depreciation that has not been taken for federal purposes because of the bonus depreciation that must be subtracted from Rhode Island income.
- Section 179 depreciation that was not taken originally for federal purposes.
- 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 or Musical Theater Production 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 that are taxable on the federal return, but tax exempt for Rhode Island purposes.
- Amounts of insurance benefits for dependents and domestic partners included in Federal AGI.
- 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 deferred under the American Recovery and Reinvestment Act of 2009.
- Modification for Certain Pensions or Annuities - Modification of up to $15,000. See instructions here to determine your taxable pension that you can deduct.
Rhode Island Subtractions from Income can be entered within your account by following the steps below:
- State Section
- Edit (blue Pencil)
- Subtractions from Income
For additional information, please see Schedule M and Form 1040 Instructions.