Rhode Island State Taxes: What Retirees Need to Know in 2025

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State taxation of pension and Social Security income. Meanwhile, 13 states and the District of Columbia fully tax pension income: Arizona. California.
Is retirement income taxable in Rhode Island? Rhode Island taxes most types of retirement income. Income from military pensions is tax-exempt. The exemption amount for pension and annuity income is $20,000, which means some taxpayers may qualify for a total exemption of $40,000.
In some cases, you may not need to file state taxes if you only lived in the state for a short time or if your income falls below a certain level. Some states follow a progressive tax rate, which means the rate increases with income, while others stick to a flat tax rate.
If you have income that is not tax-exempt, you may have to pay income taxes in retirement. For tax year 2024, if you are filing jointly with a spouse who is also 65 or older, you will file a return and pay taxes if your income exceeds $32,300 ($30,750 if your spouse isnt 65).
The qualifications are as follows: You must be 65 years of age or older and/or disabled.
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Retirement tax rates by income source Social Security income is taxed at your ordinary income rate up to 85% of your benefits; the rest is tax-free. Long-term investment gains, including qualified dividends, are taxed at the long-term capital gains rate (plus a potential 3.8% net investment income tax).
Smart Tip: Taxes on Pension Income Vary by State Its a good idea to check the different state tax rules on pension income. Some states do not tax pension payments while others doand that can influence people to consider moving when they retire.
If you exceed the income threshold for your filing status, then youll be required to file a tax return. This means that your Social Security benefits may be subject to federal and possibly state income tax.

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