Updated September 5, 2026. Quick answer: Rhode Island generally taxes pensions, 401(k), and 403(b) income, but lets qualifying retirees at full Social Security retirement age exclude up to $50,000 of that income for tax year 2025 if federal AGI is under about $107,000 (single) or $133,500 (joint). Military retired pay is treated separately and is fully exempt with no age or income limit, and traditional or Roth IRA distributions do not qualify for the general modification at all.
Confidence note: high. This page is scoped to pension, IRA and 401(k) taxation specifically. For the state’s full retirement-tax picture (Social Security, tax rates, estate and probate), see how Rhode Island taxes retirement income generally.
Pending, not current law: A bill introduced in the Rhode Island legislature (H5761) would remove the dollar cap and income limits from the Pension and Annuity Income Modification entirely for tax years beginning in 2026, but whether it was actually enacted could not be confirmed from a primary source this session, so the $50,000/income-limited version above is treated as the confirmed current law.
How pensions and retirement-account withdrawals are taxed
| Public (state/local government) pensions | Rhode Island, other state, and local government pensions are included in federal adjusted gross income and are taxable, but can qualify for the Pension and Annuity Income Modification if the recipient meets the age and income requirements. |
|---|---|
| Private (employer) pensions | Private sector pensions are taxable but can qualify for the same Pension and Annuity Income Modification as public pensions if the recipient meets the age and income requirements. |
| Federal government pensions (FERS/CSRS) | Federal government pensions and federal Thrift Savings Plan distributions are taxable but are listed as qualifying income types for the Pension and Annuity Income Modification if the recipient meets the age and income requirements. |
| Military retirement pay | Rhode Island fully exempts military service pension income, including SBP, RCSBP, and RSFPP survivor annuities, under R.I. Gen. Laws sec. 44-30-12(c)(11), effective for tax years beginning January 1, 2023, with no age or income limit. This Military Service Pension Modification cannot be combined with the general Pension and Annuity Income Modification for the same income. |
| IRA and 401(k)/403(b) distributions | 401(k) and 403(b) plan distributions can qualify for the Pension and Annuity Income Modification. Traditional IRA, Roth IRA, and SEP-IRA distributions do not qualify for this modification and are fully taxable. |
| General retirement-income exclusion | Rhode Island’s Pension and Annuity Income Modification lets a qualifying taxpayer who has reached full Social Security retirement age subtract taxable pension, 401(k), 403(b), and annuity income from federal AGI, up to $50,000 for tax year 2025 (up from $20,000 in 2023 and 2024), provided federal AGI is below an inflation-adjusted ceiling reported as $107,000 for single filers and $133,500 for joint filers in 2025, per the Division of Taxation’s own Pub. 2026-01 Retirement Income Guide (dated February 2026); an earlier Advisory 2025-22 (November 2025) had stated the joint threshold as $133,750, but the later, retirement-specific guide is treated as the authoritative current figure since it postdates and specifically covers this modification. |
Coordinate this with your overall retirement plan
An adviser can help weigh how much of a pension or IRA withdrawal to take this year, whether a Roth conversion makes sense before or after a move, and how state tax interacts with the rest of your plan, but that does not replace the numbers in your own return.
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Social Security
Rhode Island has a separate Social Security modification with its own age and income rules; consult the sibling Social Security page for details rather than assuming it follows the pension modification’s numbers. Social Security has its own rules in every state; see the full breakdown in how Rhode Island taxes retirement income generally.
Statute and sources
Governing citation: R.I. Gen. Laws sec. 44-30-12.
- Rhode Island Division of Taxation, Retirement Income Tax Guide (Pub. 2026-01)
- Rhode Island Division of Taxation, Advisory 2025-22, Inflation Adjustments
- Rhode Island Division of Taxation, Advisory 2022-19, Pension and Annuity Income Modification changes
Read September 5, 2026.
Related: how Rhode Island taxes retirement income generally · does Rhode Island tax Roth conversions? · Roth conversion taxes, all 51 jurisdictions.
General information drawn from each state’s own published statutes and revenue-department guidance, not legal, tax or financial advice. Figures and exemption amounts are current as of the date in the quick answer, are set by state law, and can change by future legislation; any pending bill named on this page is not yet law. This page cannot see your own return, which governs. We are not a law firm, a tax adviser, or a fiduciary, and this is not personalized advice.