Modifications to Net Income Due to Decoupling from P.L. 119-21, H.R.1 (2025)

This regulation implements R.I. Gen. Laws § 44-11-11(a)(1)(viii), which amends the definition of net income for Rhode Island Business Corporation Tax purposes to include as increasing modifications certain federal income, deductions, or allowances that would be subject to federal income tax for the taxable years beginning on or before January 1, 2025, but for the enactment of the federal law commonly known as the One Big Beautiful Bill Act (Public Laws No.: 119-21, H.R.1, 119th Cong. (2025)) (“H.R.1”). H.R.1 includes tax provisions that impact tax filing for certain filers for Tax Year 2025 as well as retroactive tax provisions that could impact Tax Years 2022, 2023, and 2024.

Pursuant to R.I. Gen. Laws § 44-11-11(a)(1)(viii), Rhode Island decoupled from H.R.1 for the taxable years beginning on or before January 1, 2025, with respect to certain provisions. As a result of decoupling, any income, deduction, or allowance that would be subject to federal income tax for taxable years beginning on or before January 1, 2025, but for the enactment of H.R.1, must be included in net income for Rhode Island Business Corporation Tax purposes to preserve the Rhode Island tax base.