About Rhode Island State Income Tax

Rhode Island uses a progressive tax system with three tax brackets. As a northeastern state, Rhode Island maintains moderate tax rates that are competitive within the region while funding extensive state services.

Rhode Island Tax Brackets 2026

• $0 - $70,000: 3.75%
• $70,001 - $160,000: 4.75%
• Over $160,000: 5.99%

How Rhode Island Tax is Calculated

Rhode Island's progressive tax system works as follows:

1. Income is divided into three tax brackets
2. Each bracket is taxed at its corresponding rate
3. Higher earners pay up to 5.99% on income above $160,000
4. Standard deduction reduces taxable income for eligible taxpayers

Rhode Island Tax Features

• Moderate Progressive Rates: 3.75% to 5.99% provides balanced taxation
• Favorable for Middle Income: First bracket covers up to $70,000
• Retirement Income: Social Security benefits are fully exempt from state tax
• Education Deductions: Credits available for college tuition and education expenses

Frequently Asked Questions

What is Rhode Island's income tax rate?

Rhode Island has progressive tax rates from 3.75% to 5.99%. The lowest bracket at 3.75% applies to income up to $70,000, while the top rate applies to income exceeding $160,000.

Does Rhode Island tax Social Security?

No, Rhode Island does not tax Social Security retirement benefits, making it relatively retirement-friendly for those receiving Social Security payments.

What about retirement account distributions?

Traditional IRA and 401(k) distributions are fully taxable in Rhode Island. However, pension and annuity income may qualify for favorable tax treatment under certain circumstances.

How does Rhode Island compare to neighboring states?

Rhode Island (5.99%) compared to neighbors: Massachusetts (5.05%), Connecticut (6.99%), New York (6.85%), Vermont (8.75%), and New Hampshire (5% on dividends and interest only). Rhode Island is moderate among northeastern states.

Rhode Island vs. Neighboring States

Tax comparison with surrounding states:

• Massachusetts: Progressive up to 5.05%
• Connecticut: Progressive up to 6.99%
• New York: Progressive up to 6.85%
• New Hampshire: 5% (on dividends/interest only)
• Vermont: Progressive up to 8.75%

Tips for Rhode Island Taxpayers

• Take advantage of the lower 3.75% rate on the first $70,000 of income
• Retirees should note Social Security is fully exempt
• Explore education credits for college-going students
• Consider the state's moderate tax burden compared to neighboring states
• Plan for the 5.99% top rate if you're a higher earner