Whoa! Rhode Island has really done a good job at reducing the burden on their retirees. You may not even realize this because some of the primary websites that analyze state taxes on retirees miss the boat (I am looking at YOU Kiplinger’s and Smart Asset!!!)
I ran a simulation for a retired couple in Rhode Island with $50k in Social Security income and $50k in 401k or pension income… they’d pay all of $2k in taxes.
That’s not too bad, my friends. Why so low? Because Rhode Island has a new benefit that allows retirees with income under to exempt $15k per person from qualified plan distributions.
BE ADVISED IRAs ARE NOT INCLUDED!!!
And if income is below $100k Rhode Island doesn’t tax Social Security either.
This is all good.
Sales tax is in the middle of the pack when TOTAL sales tax are included, state and locality.
Property taxes are high with little exemptions, clocking in at over 1.50%.
But give credit to the new Democratic governor for getting these tax bills through that are definitely favorable to retirees.
See the video here.
For more info the Rhode Island Retirement Income exemption click here.