Rhode Island Tax Changes 2026: H.R. 1 Decoupling | HelloBooks Rhode Island decouples from federal 174A expensing, the 163(j) change and higher section 179 limits for 2025, and does not allow tips or overtime.
Rhode Island used emergency regulations in December 2025 to decouple from several federal business provisions for 2025. Expect add-backs on business clients’ returns.
Free Plan with invoices within 200 transactions, bills & quotes — no credit card.
Decoupled for
Tax year 2025 and earlier
Applies: Tax year 2025From IRS.gov · checked October 10, 2026
The personal income tax and business corporation tax regulations both decouple from:
Rhode Island does not allow the federal vehicle loan interest, tips or overtime deductions. Because they are below federal AGI, no add-back line is needed, but they will not reduce the RI-1040.
The pass-through entity tax continues despite the higher federal SALT cap, and participating owners must make the related add-back.
The plain-English summary for business owners
Comparison · bonus depreciation
Comparison · Schedule 1-A at the state level
Business returns · research costs
General information for tax professionals, not advice on a specific return. Figures are from IRS.gov on the date shown; check the current IRS instructions before filing.
Free Plan with full access to the AI accountant — no credit card, no time limit.