Updated October 16, 2026. Quick answer: Rhode Island names both plans: its Retirement Income Guide lists “distributions from pensions, annuities, 401(k) plans, 403(b) plans, and governmental 457(b) plans” as pension and annuity income that can qualify for a modification of up to $50,000 per person for Tax Year 2025, if age and income conditions are met.
More state retirement-income schedules, line by line: Rhode Island Schedule M.
Rhode Island at a glance
| Item | What the documents say |
|---|---|
| How the state treats 403(b) and 457(b) withdrawals | Yes, 403(b) plans and governmental 457(b) plans are named as qualifying income |
| Do the state’s documents name these plans? | The documents read name both 403(b) and 457 plans |
| Retirement exclusion or credit | Pension and Annuity Income Modification of up to $50,000 per person for Tax Year 2025, which requires full retirement age and a federal AGI limit |
| Public-employee pension rule | The documents read do not state a separate public-employee rule |
| Rate in the documents read | Progressive 3.75%, 4.75% and 5.99%; 5.99% over $181,650 |
| Changed for 2026? | The modification rose from $20,000 to $50,000 for tax years beginning January 1, 2025; the documents read do not describe 2026 |
What the Rhode Island documents say
The guide says the modification can “reduce federal AGI for Rhode Island tax purposes by up to $50,000”. The taxpayer must have reached Social Security full retirement age, and federal AGI must be at or below $107,000 for a single filer. For married filing jointly the Retirement Income Guide prints $133,500, while the RI-1040 instructions print $133,750. The RI-1040 instructions also say only retirement income received by a taxpayer born on or before March 1, 1959 qualifies for this modification.
Under the guide, an IRA does not qualify. The RI-1040 instructions print the top bracket at 5.99% over $181,650.
Withholding and federal tax
Whether a state withholds is a separate rule: see state withholding on retirement withdrawals. Federal rules: 403(b) withdrawal rules and 457(b) withdrawal rules. The IRS says pension and annuity payments from a qualified employer plan have “all or some portion of the amounts you receive may be taxable”.
What the documents do not say
- The guide covers Tax Year 2025 only.
- The documents read do not say whether a separate public-employee exclusion exists.
- Whether a particular 403(b) or 457(b) distribution counts depends on the guide’s definition of pension and annuity income and the AGI test.
Common mistakes
- Assuming Rhode Island’s rule for a 401(k) or IRA also covers a 403(b) or 457(b): read whether its documents name the plan.
Related: whether Rhode Island taxes 401(k) and IRA withdrawals, Rhode Island retirement taxes, whether Rhode Island taxes pensions, 403(b) withdrawal rules, 457(b) withdrawal rules, and state withholding on retirement withdrawals.
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Answer againSources
- Rhode Island Retirement Income Tax Guide: Modifications for Retirement Income (Tax Year 2025), Publication 2026-01: https://tax.ri.gov/sites/g/files/xkgbur541/files/2026-02/PUB_2026-01_Retirement_Income_Guide.pdf
- 2025 Instructions for Filing RI-1040: https://tax.ri.gov/sites/g/files/xkgbur541/files/2025-12/2025%201040R%20Instructions%20122025.pdf
- IRS Tax Topic 410, Pensions and annuities: https://www.irs.gov/taxtopics/tc410
Sources: the primary documents linked above, read on October 16, 2026. General information, not tax advice. Your own facts decide the outcome, and a tax professional or the state agency itself is the right place to confirm anything consequential.