Does Rhode Island follow the federal no-tax-on-tips and overtime deductions?
DOES NOT CONFORM
Rhode Island does not follow the federal deductions for state income tax. You can still claim the tips and overtime deductions on your federal return (Schedule 1-A) — they simply do not reduce your Rhode Island state tax. Do not assume your state return treats this income the way your federal return does.
Verified against the official state source below — last verified October 26, 2026
| Deduction | Rhode Island position |
|---|---|
| Federal tips deduction (IRC §224) | Does not conform |
| Federal overtime deduction (IRC §225) | Does not conform |
What the state itself says
- Official source
- Rhode Island Division of Taxation, "ADV 2025-20 — Advisory for Taxpayers and Tax Professionals: Rhode Island Decouples from Recently Enacted Federal Legislation — H.R. 1" (October 2, 2025)
- Tax years covered
- 2025 — decoupling enacted in the FY2026 Budget (R.I. Gen. Laws §44-30-12(b)(9)) for taxable years beginning on or before January 1, 2025; the advisory notes a working group was to report by Oct. 31, 2025 on later years.
Rhode Island starts from federal AGI plus modifications and affirmatively decoupled from the H.R. 1 individual provisions; the advisory explains the tips/overtime/car-loan provisions are below-the-line and not reflected in federal AGI, and provides a dedicated RI Schedule HR1-Individual.
Your federal deduction is separate
Whatever your state does, the federal deductions run on their own rules: check your W-2 codes with the W-2 Code Checker, estimate with the Tips Calculator and Overtime Calculator, and see the glossary for any term. All state positions: the state-by-state index.
State position verified October 26, 2026 from the official source above. State guidance changes; confirm on the source before filing. This page is general information, not tax advice.