2025 -- S 0182 SUBSTITUTE A

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LC001105/SUB A

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2025

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A N   A C T

RELATING TO TAXATION -- PERSONAL INCOME TAX

     Introduced By: Senators Gallo, DiPalma, Tikoian, LaMountain, Murray, and Lawson

     Date Introduced: February 07, 2025

     Referred To: Senate Finance

     It is enacted by the General Assembly as follows:

     SECTION 1. Chapter 44-30 of the General Laws entitled "Personal Income Tax" is hereby

amended by adding thereto the following section:

     44-30-71.5. Voluntary withholding of tax from mutual fund individual retirement

accounts.

     (a) The tax administrator may enter into agreements with mutual fund companies to allow

for the deduction and withholding of taxes that may be due to the state from required minimum

distributions that are subject to Rhode Island personal income tax. The amount to be deducted,

withheld and paid to the state by a mutual fund company shall be in an amount substantially

equivalent to the tax reasonably estimated to be due as a result of the inclusion of the distribution

in the taxpayer’s Rhode Island income that is received during any calendar year beginning on or

after January 1, 2026.

     (b) The method of determining the amount to be withheld shall be prescribed by regulations

of the tax administrator, with due regard to the withholding exemptions of the taxpayer.

     (c) The provisions of this section shall apply only to a taxpayer who so elects to have the

withholding made and withholding shall not be required under this section. A taxpayer's election

to have a withholding made, or choice to not have withholding made, or a failure to make an

election under this section shall not have any effect on the computation of tax due before credits

and payments or of interest or penalties that may be due to the state under other sections of this

chapter.

     (d) In the event that a mutual fund company has not entered into an agreement with the tax

administrator and the taxpayer makes an election for taxes to be deducted and withheld by the

mutual fund company and paid over to the state and if payment is made by the mutual fund company

in accordance with the taxpayer's election to the state then the state shall accept such payment and

credit the taxpayer's account for the amount of the payment.

     SECTION 2. This act shall take effect on January 1, 2026.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO TAXATION -- PERSONAL INCOME TAX

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     This act would allow a resident taxpayer to elect to have state taxes withheld from

distributions from a mutual fund individual retirement account.

     This act would take effect on January 1, 2026.

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