Federal and Rhode Island income tax
Pension benefits (except certain disability benefits) are taxable income for federal and Rhode Island income tax. ERSRI withholds only federal and Rhode Island tax; you choose withholding on the Certificate of Tax Withholding Preference and can change it online. Handbook, p. 37, Pension Deductions and Taxability
ERSRI pensions, refunds and benefits are exempt from every state and municipal tax except the Rhode Island personal income tax. R.I. Gen. Laws § 36-10-32
The Rhode Island pension subtraction
Rhode Island lets you subtract up to $50,000 (tax years from 2025) of taxable pension and annuity income from federal AGI if you have reached Social Security full retirement age and your federal AGI is under the Social Security modification's income limit (inflation-indexed). R.I. Gen. Laws § 44-30-12(c)(9)(i), (vi); Treasurer's Article 12 guide (July 1, 2024), p. 12 ('Beginning January 1, 2025, the exemption will increase to $50,000'); SFO FY2027, p. 513
| From tax year | Up to |
|---|---|
| 2017 | $15,000 |
| 2023 | $20,000 |
| 2025 | $50,000 |
| Tax year | AGI limit, single | AGI limit, joint |
|---|---|---|
| 2023 | $101,000 | $126,250 |
| 2025 | $107,000 | $133,750 |
Treasurer's Article 12 guide (July 1, 2024), p. 12 ('under $101,000 for single filers ... in tax year 2023 and under $126,250 for joint filers'); SFO FY2027, p. 512
Full retirement age is your Social Security age; see when can I retire? If you leave teaching early, a refund is taxed differently; see leaving teaching.
The FY2027 budget (2026 session) gives the pension modification its own inflation adjustment and drops the full-retirement-age test for the Social Security modification from tax year 2027; the saved statute text does not yet show these changes.
What would settle it: 2026 public law text or the RI Division of Taxation's instructions.
What our sources say
- Your pension (except some disability benefits) is taxable for federal and Rhode Island income tax. ERSRI withholds only federal and Rhode Island tax; living elsewhere, check your state's rules.Handbook, p. 37, Pension Deductions and Taxability
- ERSRI pensions are exempt from every other state and local tax in Rhode Island.R.I. Gen. Laws § 36-10-32
- Rhode Island lets you subtract up to $50,000 a year (from tax year 2025; $20,000 before) of taxable pension income if you've reached Social Security full retirement age and your income is under a limit ($107,000 single, $133,750 joint for tax year 2025).Treasurer's Article 12 guide (July 1, 2024), p. 12; R.I. Gen. Laws § 44-30-12(c)(9); SFO FY2027, p. 512
- Check with ERSRIA 2026 law changes how those limits are indexed from tax year 2027. Check the Division of Taxation's instructions.SFO FY2027, p. 513Only the Senate Fiscal summary is in our sources.
- Pick your withholding on the Certificate of Tax Withholding Preference; change it online any time.Handbook, p. 37
Questions
Is an ERSRI pension taxed in Rhode Island?
Yes, it's taxable income for federal and Rhode Island income tax. But Rhode Island lets you subtract up to $50,000 a year (from tax year 2025) if you've reached Social Security full retirement age and your income is under the limit.
What is the income limit for the pension subtraction?
For tax year 2025, federal AGI under $107,000 (single) or $133,750 (joint). It's indexed for inflation.
Source: ERSRI Membership and Retirement Handbook, 10th edition, June 2020 (with the 2024 Article 12 changes from the Treasurer's guide, July 1, 2024), p. 37. Also: Rhode Island General Laws; Treasurer's guide to the 2024 pension changes (Article 12), July 1, 2024; Senate Fiscal Office budget analyses. Last reviewed .