PROVIDENCE, R.I. (WJAR) — Gov. Dan McKee is pushing a plan to eliminate the state tax on Social Security benefits for people who retire before age 67. The proposal would phase out the tax over the next three years.
McKee promoted the plan Monday at a senior center in Newport, saying it would help retirees keep more of their benefits.
“We want to eliminate the tax on Social Security. That is a really good move for us,” he said.
Gov. Dan McKee spoke at a press conference proposing eliminating the tax on Social Security on Monday, March 16, 2026. (WJAR)
Currently, Rhode Islanders who collect Social Security before age 67 pay a state tax on their benefits. Early retirees can be taxed between 3.75% and about 6%, depending on their income and if they qualify for an exemption.
“Certainly it would help with bills more than anything because everything is going up exponentially,” Rhode Island retiree Anna Barbieri said.
Rhode Island is one of eight states that tax Social Security for at least some beneficiaries.
Catherine Taylor with AARP Rhode Island says the tax could push retirees to move to other states that don’t tax Social Security benefits.
“If folks are going to move in order to keep a few hundred dollars in their pocket, then we lose so much by not having those folks here,” Taylor told NBC10 in an interview.
Taylor also pointed to an AARP poll that found 89% of Rhode Islanders support eliminating the tax.
McKee’s office said 9,200 early retirees would be fully exempt from the tax in the first year.
“It’s a $40 to 50 million dollar item in our budget over a few years,” he said. “But we can phase that in a way that we can absorb that inside of our budget.”
However, University of New Haven professor of practice Brian Marks said the state would still need to make up for the lost revenue.
A pile of money being printed. (FILE)
“One cannot ignore the fact that there’s going to be a revenue decline to cover spending for the state of Rhode Island,” Marks said.
The budget still needs to pass in the Rhode Island General Assembly.
Rhode Island House Republicans say they support, “any effort to reduce the tax burden on Rhode Islanders, including eliminating the state income tax on Social Security benefits.”