Updated October 16, 2026. Quick answer: Rhode Island gives IRA income no pension modification and its documents read do not mention inherited IRAs: the Retirement Income Guide says “IRA income does not qualify” for the Pension and Annuity Income Modification.
Rhode Island at a glance
| Item | What the documents say |
|---|---|
| How the state taxes retirement-account income | Taxed as income; IRA income does not qualify for the Pension and Annuity Income Modification |
| Do the state’s documents address beneficiaries? | Not addressed for inherited IRAs; the beneficiary wording is the fiduciary adjustment for estates and trusts |
| Retirement exclusion or credit | Up to $50,000 of taxable pension and annuity income for tax year 2025, which excludes IRA income; the taxpayer must have reached the age for full or unreduced Social Security benefits and meet federal AGI limits |
| Rate in the documents read | The 2025 schedule prints 3.75%, 4.75% and 5.99%, with 5.99% over $181,650 |
| State inheritance or estate tax | Not mentioned in the documents read |
| Changed for 2026? | For tax years beginning January 1, 2025, the modification increased from $20,000 to $50,000; nothing for 2026 is stated |
What the Rhode Island documents say
The Retirement Income Guide says the modification covers taxable pension and annuity income that is included on line 5b of the federal return, and that “IRA income does not qualify”.
R.I. Gen. Laws 44-30-12 sets the amount: for tax years beginning on or after January 1, 2025, “a modification shall be allowed for up to fifty thousand dollars ($50,000)” for a person who has attained the age used for calculating full or unreduced Social Security retirement benefits, within federal AGI limits.
The documents give two joint-filer limits. The guide prints $107,000 for single filers and $133,500 for a married couple filing jointly; the RI-1040 instructions print $133,750 for married joint filers, so the two documents differ on that figure.
On beneficiaries, the RI-1040 instructions allow a fiduciary adjustment for income that maintains “its character as it flows from the fiduciary”. That line is about estate and trust income, with tax-exempt interest as its example, not about an inherited IRA.
The guide notes the change: the amount that can be exempted “has increased from $20,000 to $50,000”. The 2025 RI-1040 schedule prints 3.75%, 4.75% and 5.99%.
The federal 10-year rule and your Rhode Island tax year
IRS Publication 590-B says a beneficiary may be required to take the entire account balance by the “end of the 10th year following the year of the owner’s death”, with exceptions for certain beneficiaries. Because the balance generally has to come out within that window, the timing of each withdrawal decides which tax year it lands in. See the 10-year rule and annual RMDs, lump sum versus spreading withdrawals and inherited IRA rules.
Withholding and other state taxes
Whether a state withholds from a withdrawal is a separate rule: see state withholding on retirement withdrawals. For Rhode Island’s own death taxes, see Rhode Island estate tax.
What the documents do not say
- The documents read do not mention inherited accounts or beneficiaries of retirement accounts.
- The guide says no income from a traditional, Roth, SEP or any other type of IRA qualifies for the modification; it does not name inherited IRAs.
- They say nothing about a deduction or credit for estate tax or income in respect of a decedent.
Common mistakes
- Assuming Rhode Island’s rule for your own retirement income also covers an account you inherited: read whether its documents address beneficiaries, and confirm the point with a Rhode Island preparer.
Related: state tax on inherited IRA withdrawals, state by state, whether Rhode Island taxes 401(k) and IRA withdrawals, Rhode Island retirement taxes, Rhode Island estate tax, inherited IRA rules, spouse versus non-spouse beneficiary rules, and state withholding on retirement withdrawals.
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Answer againSources
- Rhode Island Retirement Income Tax Guide: Modifications for Retirement Income: 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
- R.I. Gen. Laws 44-30-12 Rhode Island income of a resident individual: https://webserver.rilegislature.gov/Statutes/TITLE44/44-30/44-II/44-30-12.htm
- IRS Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs): https://www.irs.gov/pub/irs-pdf/p590b.pdf
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.