Partly taxed
How Rhode Island taxes retirement income
Rhode Island exempts Social Security for people who have reached Social Security full retirement age, as long as their income is under a limit that rises with inflation each year. Above that limit, Social Security is taxed the same way the IRS taxes it.
For tax years starting in 2025, the pension and annuity modification lets each person at full retirement age exclude up to $50,000 a year of taxable pension and annuity income, under the same income limit. That is a large jump from the $20,000 allowed for 2023 and 2024, and it covers most ERSRI teacher and state pensions in full. On a joint return, each spouse who has reached full retirement age can claim it.
Full retirement age is 66 for people born from 1943 to 1954, rising to 67 for people born in 1960 or later. Retirees under that age, or above the income limit, pay tax on pensions at rates from 3.75% to 5.99%. IRA withdrawals are not counted as pension and annuity income for the modification.
Questions
Does Rhode Island tax pensions?
Not the first $50,000 per person from 2025, for retirees at full retirement age with income under the state limit.
Does Rhode Island tax Social Security?
Not for retirees at full retirement age under the income limit. Above it, Social Security is taxed like federal.
What counts as full retirement age?
The Social Security full retirement age for your birth year: 66 for 1943 to 1954, up to 67 for 1960 and later.