Does Rhode Island Tax Social Security and Retirement Income?

Social Security is exempt only at full retirement age and under an income limit

Rhode Island starts from federal adjusted gross income, which already holds the part of Social Security that is taxed federally, and lets some retirees subtract it. Three conditions apply: federal AGI includes taxable Social Security, the taxpayer has reached full retirement age as the Social Security Administration defines it, and federal AGI is below a limit for the filing status. The statute set the limit at $80,000 for single filers and $100,000 for joint filers in 2016 and indexes it to inflation each year. (R.I. Gen. Laws 44-30-12, Rhode Island income of a resident individual: modifications for Social Security, pension and annuity income and military service pensions)

For the 2025 tax year the limit is $107,000 for single filers, heads of household and married people filing separately, and $133,750 for joint filers and surviving spouses. The Division of Taxation normally announces the next year’s limit just before filing season, and the 2026 figure had not been published on the review date, so the examples on this page use the 2025 amounts. The test is all or nothing: the worksheet asks whether federal AGI is less than the limit, and a filer at or above it subtracts nothing. (Rhode Island Division of Taxation, 2025 Modification Worksheet: Taxable Social Security Income Worksheet (Schedule M, line 1s))

Full retirement age depends on the year of birth: 66 for people born from 1943 to 1954, rising by two months a year to 66 and 10 months for 1959, and 67 for anyone born in 1960 or later. A person born in 1960 therefore does not qualify on a 2026 return, even if benefits began at 62. For a couple filing jointly the age test applies to each spouse, and the worksheet allows only the share of the taxable benefit that belongs to the spouse who has reached the age. (Rhode Island Division of Taxation, Publication 2026-01: Rhode Island Retirement Income Tax Guide (February 2026, for tax year 2025))

The federal government is a separate matter. Up to 85% of a benefit can be taxed on a federal return once other income passes fixed thresholds, wherever you live. Our taxable Social Security calculator shows how much of yours is counted.

Up to $50,000 of pension income per person is exempt, with the same age and income tests

For tax years beginning on or after January 1, 2025, Rhode Island allows a subtraction of up to $50,000 of taxable pension and annuity income. The figure was $15,000 from 2017 to 2022 and $20,000 for 2023 and 2024. The taxpayer must have reached full Social Security retirement age and have federal AGI below the same limit that applies to the Social Security modification, so the two breaks are won or lost together. (R.I. Gen. Laws 44-30-12, Rhode Island income of a resident individual: modifications for Social Security, pension and annuity income and military service pensions)

The modification is applied person by person, so a couple filing jointly can subtract up to $100,000 when both spouses have reached full retirement age and each has that much qualifying income. It covers private-sector pensions, federal, state and local government pensions including CSRS and FERS, the Thrift Savings Plan, 401(k), 403(b) and 457(b) plans, annuities and foreign pensions. The practical test is the federal return: whatever is properly reported as taxable on Form 1040, line 5b, qualifies. (Rhode Island Division of Taxation, Publication 2026-01: Rhode Island Retirement Income Tax Guide (February 2026, for tax year 2025))

On the 2025 return the amount goes on Schedule M, line 1t. If only one spouse has reached full retirement age, only that spouse’s pension income is entered. The instructions state the income test as federal AGI of $107,000 or less (single) and $133,750 or less (joint) for 2025. (2025 Instructions for Filing Form RI-1040, Rhode Island Resident Individual Income Tax Return: residency, Schedule M modifications)

Military service pensions have been fully exempt since tax year 2023, with no age or income condition, and a surviving spouse receiving the pension qualifies as well. The amount is subtracted on its own Schedule M line and cannot also be counted toward the $50,000 pension modification. (Rhode Island Division of Taxation, Publication 2026-01: Rhode Island Retirement Income Tax Guide (February 2026, for tax year 2025))

401(k) and 403(b) withdrawals share the $50,000 break; IRA withdrawals are fully taxed

Rhode Island draws its line between employer plans and individual accounts. Distributions from a 401(k), 403(b) or governmental 457(b) plan are reported on federal line 5b and count toward the $50,000 pension and annuity modification. Distributions from a traditional IRA, SEP-IRA or SIMPLE IRA are reported on lines 4a and 4b and do not qualify at any age or income. (Rhode Island Division of Taxation, Publication 2026-01: Rhode Island Retirement Income Tax Guide (February 2026, for tax year 2025))

A completed direct rollover from an employer plan to an IRA is not a taxable distribution and is not part of the modification. Once the money is in the IRA, later withdrawals are IRA distributions and fall outside the $50,000 break, so a retiree who would otherwise have qualified gives up the Rhode Island subtraction on that money by rolling it over. (Rhode Island Division of Taxation, Publication 2026-01: Rhode Island Retirement Income Tax Guide (February 2026, for tax year 2025))

A Roth conversion is taxed in full in the year it is made. It is IRA income on the federal return, so no modification applies, and because it is part of federal AGI it can push a household over the limit and remove the Social Security and pension subtractions for that year. (2025 Instructions for Filing Form RI-1040, Rhode Island Resident Individual Income Tax Return: residency, Schedule M modifications)

To size a conversion against federal brackets and Medicare surcharges, see the Roth conversion calculator; for required withdrawals, the RMD calculator.

Interest, dividends and capital gains are taxed at ordinary rates

Rhode Island applies one rate schedule to taxable income for every filing status. Long-term capital gains and qualified dividends in federal AGI flow through to that schedule and are taxed at the same 3.75%, 4.75% and 5.99% rates as a pension. They also count toward the federal AGI test for the Social Security and pension modifications. (Form RI-1040ES (2026), Rhode Island Resident and Nonresident Estimated Payment Coupons: 2026 tax rate schedule, deduction and exemption worksheets)

Interest on U.S. government obligations, such as Treasury bills and savings bonds, is subtracted on Schedule M, line 1a, and the return asks for a schedule showing the source and amount. Interest on bonds issued by other states and their municipalities, which is free of federal tax, is added back on line 2a. Rhode Island’s own bonds are not added back. (2025 Instructions for Filing Form RI-1040, Rhode Island Resident Individual Income Tax Return: residency, Schedule M modifications)

For 2026 every filer pays 3.75% on the first $82,050 of Rhode Island taxable income, 4.75% from $82,050 to $186,450 and 5.99% above $186,450. The brackets are the same for single and joint returns, so two incomes on one return reach the higher rates sooner than they would in a state that doubles its brackets for couples. (Rhode Island Division of Taxation, Advisory 2025-22 (November 3, 2025): inflation-adjusted amounts for tax year 2026, and Social Security, pension and property tax relief amounts for tax year 2025)

The 2026 standard deduction is $11,200 for single filers and married people filing separately, $22,400 for joint filers and surviving spouses and $16,800 for heads of household. Each taxpayer, spouse and dependent adds a $5,250 exemption. Federal itemized deductions cannot be used, and there is no larger deduction or exemption for age 65. (Rhode Island Division of Taxation, Advisory 2025-22 (November 3, 2025): inflation-adjusted amounts for tax year 2026, and Social Security, pension and property tax relief amounts for tax year 2025)

Both amounts are phased out for higher incomes. Above $261,000 of modified federal AGI the standard deduction and exemptions are cut by 20% for each $7,450, or part of $7,450, over that figure, and they are zero once income is more than $29,800 past it. The example couple with $279,500 is three steps in, so it keeps 40%: $8,960 of standard deduction and $4,200 of exemptions. (Form RI-1040ES (2026), Rhode Island Resident and Nonresident Estimated Payment Coupons: 2026 tax rate schedule, deduction and exemption worksheets)

Social Security modification: the full federally taxable benefit is subtracted when the taxpayer has reached full retirement age and federal AGI is under the limit, $107,000 (single) or $133,750 (joint) for 2025. (Rhode Island Division of Taxation, Advisory 2025-22 (November 3, 2025): inflation-adjusted amounts for tax year 2026, and Social Security, pension and property tax relief amounts for tax year 2025)

Pension, 401(k) and annuity modification: up to $50,000 per person, with the same age and income tests. IRA income does not qualify. (Rhode Island Division of Taxation, Publication 2026-01: Rhode Island Retirement Income Tax Guide (February 2026, for tax year 2025))

Military service pensions: fully subtracted at any age and income. (R.I. Gen. Laws 44-30-12, Rhode Island income of a resident individual: modifications for Social Security, pension and annuity income and military service pensions)

Property tax relief credit on Form RI-1040H: for residents 65 or older or disabled with household income of $40,730 or less, up to $700 on the 2025 form. (2025 Form RI-1040H, Rhode Island Property Tax Relief Claim)

The same three households appear on every state page, so the figures can be compared across states. Each is a full-year resident taking the standard deduction, with no dependents. The figures are state income tax only: any county, city or school district income tax is described on this page but not added in. Pension income is from a private employer, and IRA figures are taxable withdrawals from traditional accounts. The state tax is our calculation from Rhode Island's published 2026 rules; it is an illustration, not a return.

These households also owe federal income tax, which is the same wherever they live. The tax bracket calculator and the guide to taxes in retirement cover that side.

Property tax in Rhode Island is set and collected by the cities and towns, not by the state. As a comparative figure, the Tax Foundation’s 2026 report, using 2024 Census data, puts the effective rate on owner-occupied homes at 1.12% of value, 15th-highest among the states. County figures in the same report run from 0.86% in Newport County to 1.37% in Kent County. (Tax Foundation, Property Taxes by State and County, 2026 (comparative figures from Census ACS data))

Relief for older homeowners is local, and it varies a great deal. State law authorizes each municipality’s program separately. East Greenwich, for example, may exempt up to $26,000 of a home’s value for owners aged 65 to 70, rising in steps to $58,000 at 85 or older, and Cranston may exempt up to $9,000 of value for owners over 65. These exemptions are applied without regard to income. (R.I. Gen. Laws 44-3-13, Persons over the age of 65 years: exemption (by city and town))

A separate statute lets most cities and towns freeze the tax rate and valuation on the home of an owner aged 65 or older, or totally and permanently disabled, whose income is low. In Cranston the ceiling is $20,000 of income from all sources for one person and $23,000 for two or more, unless the city council sets a lower figure, and the freeze covers owner-occupied one- and two-family homes. (R.I. Gen. Laws 44-3-16, Elderly: freeze of tax rate and valuation)

Providence gives any owner-occupant who is 65 as of December 31 an elderly exemption, which the city lists at $750. The applicant must own the property before December 31, live in it as a primary residence and file by March 15. (City of Providence, Tax Assessor: tax exemption information (elderly exemption))

Since July 1, 2026 the state itself taxes residential property assessed at more than $1 million that is not the owner’s primary residence, meaning the owner does not occupy it for at least 183 days of the year. The rate is $2.50 for each $500 of assessed value above $1 million, so $1,000 a year on a $1.2 million house, billed by the Division of Taxation in four installments. Homes rented out for 183 days or more are exempt. (Rhode Island Division of Taxation, Frequently Asked Questions: tax on non-owner occupied properties assessed at over $1 million (March 2026))

Rhode Island’s sales and use tax is 7% on retail sales, rentals and leases of most goods and on certain services. Restaurants and bars also collect a 1% local meals and beverage tax. A use tax at the same 7% is owed on taxable items bought without Rhode Island tax, and individuals can report it on the income tax return. (Rhode Island Division of Taxation: Sales and use tax (7% rate, local meals and beverage tax, use tax))

Food and food ingredients are exempt, though candy, soft drinks, dietary supplements, alcohol and prepared food are not. Drugs sold on prescription, medical oxygen and insulin are exempt, as is durable medical equipment for home use; over-the-counter drugs are taxed. Clothing and footwear are exempt up to $250 per item, with tax due only on the part of a price above $250. Heating fuel, electricity and gas are also exempt. (R.I. Gen. Laws 44-18-30, Gross receipts exempt from sales and use taxes (food, prescription drugs, clothing, heating fuel))

Rhode Island has an estate tax and no inheritance tax. For deaths in 2026 the tax is offset by a credit of $87,940, which is the tax on a net taxable estate of $1,838,056, so estates at or below that size owe nothing. The credit is raised each January by the change in the Consumer Price Index; the 2025 threshold was $1,802,431. (Rhode Island Division of Taxation, Advisory 2025-27 (December 30, 2025): estate tax credit and threshold for 2026)

The tax is figured from the Rhode Island Tax Computation Schedule in Form RI-706, which follows the old federal credit for state death taxes. After a $60,000 exclusion, marginal rates begin at 0.8% and rise in steps to 16% on the part of an adjusted taxable estate above $10,040,000. The credit is then subtracted from the result, so an estate just over the threshold owes only the tax attributable to the excess. (Form RI-706, Rhode Island Estate Tax Return: Rhode Island Tax Computation Schedule and credit chart)

Form RI-706 and any payment are due nine months after the date of death, with an automatic six-month extension to file available on Form RI-4768. Estates with a gross value under $1.3 million complete a short version of the form. The $50 filing fee was removed for deaths on or after January 1, 2025. (Form RI-706 Instructions: who must file, due date, extension and line-by-line computation)

The tax reaches both residents and nonresidents. When part of an estate has its tax situs elsewhere, the Rhode Island tax is multiplied by the share of the gross estate located in the state. Real estate and tangible property are sited where they sit; intangible assets such as securities are sited in Rhode Island only if the decedent was a resident. (R.I. Gen. Laws 44-22-1.1, Tax on net estate of decedent (credit, residents and nonresidents, tax situs))

The federal estate tax applies in every state. The estate tax calculator estimates both the federal tax and any state tax.

From tax year 2027 the Social Security modification no longer requires full retirement age. The fiscal year 2027 budget, enacted in June 2026, removes the age test for tax years beginning on or after January 1, 2027 and keeps the income limit, so people who claim early will qualify from the 2027 return if their federal AGI is under the limit. The Division’s summary describes no matching change to the pension modification. (Rhode Island Division of Taxation, Summary of Legislative Changes (July 22, 2026): high-income surtax and Social Security relief from tax year 2027)

The same budget adds a surtax on personal income over $1 million: 1% for tax year 2027, 2% for 2028 and 3% from 2029, on top of the 5.99% top rate. The $1 million threshold is the same for every filing status and will be indexed. Trusts and estates pay it above $36,427. (Rhode Island Division of Taxation, Summary of Legislative Changes (July 22, 2026): high-income surtax and Social Security relief from tax year 2027)

The tax on non-owner-occupied homes assessed above $1 million took effect on July 1, 2026, with the first quarterly payment due September 15, 2026. From the tax year beginning July 1, 2027 the $1 million threshold is indexed to inflation. (Rhode Island Division of Taxation, Frequently Asked Questions: tax on non-owner occupied properties assessed at over $1 million (March 2026))

For 2026 the estate tax threshold rose to $1,838,056. The second tier of the real estate conveyance tax, paid when a home sells for more than a set price, is now indexed too: for 2026 it applies at $3.75 per $500 to the part of the price over $824,000, in addition to the first-tier tax. (Rhode Island Division of Taxation, Advisory 2026-02 (January 14, 2026): 2026 tax changes, including the conveyance tax and estate tax thresholds)

A Rhode Island resident is a person domiciled in the state, or a person domiciled elsewhere who keeps a permanent place of abode in Rhode Island and is in the state for more than 183 days of the year. The statute adds that the location of a person’s doctors, lawyers, financial advisers and other professional advisers, and gifts to Rhode Island charities, are not to be considered in deciding domicile. (R.I. Gen. Laws 44-30-5, “Resident” and “nonresident” defined)

Domicile is the place a person treats as a permanent home and intends to return to, and it continues until a new one is established. Someone claiming a change must show an intent to abandon the old domicile, an intent to acquire a new one and actual physical presence there. Part-year residents and nonresidents file Form RI-1040NR. (2025 Instructions for Filing Form RI-1040, Rhode Island Resident Individual Income Tax Return: residency, Schedule M modifications)

Federal law bars a state from taxing the retirement income of someone who is no longer a resident or domiciliary. Pension, 401(k) and IRA payments earned in a Rhode Island career are taxed only by the state where the retiree lives when they are paid. (4 U.S.C. 114, Limitation on State income taxation of certain pension income)