PROVIDENCE, R.I. (WPRI) – Retirees with a pension could soon be receiving extra cash – thanks to Rhode Island’s new budget.
The first $15,000 in benefits from federal, state, local, military, and even private pensions will not be subject to income tax in Rhode Island starting in 2017 for retirees who make less than certain amounts.
An estimate by the R.I. Office of Revenue Analysis shows more than 24,000 residents are expected to benefit, and save on average $260 each.
“I always think it’s good to give something back to our taxpayers,” House Speaker Nicholas Mattiello, who championed the tax break on pensions, told Eyewitness News. “When people become elderly, their income capacity tends to decrease a bit, and folks that have worked all their lives should deserve some benefit.”
Here’s what you need in order to qualify:
- You must be of full Social Security retirement age, which varies by when you were born.
- If you’re a single filer, your federal adjusted gross income must be $80,000 or less.
- If you’re a joint filer, that number has to be $100,000 or less.
The pension tax break is expected to cost the state an estimated $13 million a year.
Gov. Gina Raimondo plans to sign the budget Friday morning. A spokesperson for Raimondo said she’s pleased with the budget, saying: “This budget makes pro-growth, pro-job investments in economic development, education, and infrastructure.”