Money — 5 months ago

Rhode Island Income Tax Law in Full

by Perry H.

Rhode Island Income Tax Law, Rhode Island Income Tax Laws

What are Law Income Requirements in the State of Rhode Island?

Rhode Island is one of the few states in the USA that have gone against the Federal Govt.’s decision to do away with tax exemptions.

Filing tax returns in Rhode Island

It is mandatory in Rhode Island to file a state tax return, even if you had to file a Federal tax return. For filing of returns, the Division of Taxations is the authority. April 15th is the due date for submitting of state returns. If the day is a holiday, then the next business day is when the tax returns for the previous calendar year.

You can get an extension for filing returns by six months, on request. But all taxes due must be paid to the state by 15th of April.

Failure to file returns by 15th April will lead to a penalty of 5% of the tax for each month of delay, subject to a maximum of 25% of total tax.

Checking tax return status in Rhode Island
While filing returns, you need to indicate your tax filing status in the tax form. The status can be as Single, Head of Household, Married and filing separately, Married and filing a joint return and qualifying widow or widower.

Rhode Island Income Tax Law

Tax rates in Rhode Island
The tax rates in the state of Rhode Island are organized into three slabs and are the following:

  • If your taxable annual income is between $0 to $62,550, then you need to pay 3.75% as tax.
  • If your taxable annual income is between $62,551 to $142,150, then you need to pay 4.75% as tax.
  • If your taxable annual income is more than $142,151, then you need to pay 5.99% as tax.

Standard Deduction in Rhode Island
Rhode Island offers standard deductions for all taxpayers, as per their tax filing status.

  • For single taxpayers, the standard deduction is $8,525
  • For  the married filing jointly or qualifying widow/widower, it is $17,050
  • For married filing separately, it is $8,525
  • For the head of the household, the standard deduction is $12,800
  • A personal exemption can also be claimed on taxes, for you and your dependents. That is $4,000.
 

Federal deduction in Rhode Island
Itemized deductions on federal taxes paid cannot be claimed in Rhode Island. However, it is possible to modify your income based on family education, contribution to the 529 plan, and for organ donation. One point to be kept in mind, that there are modifications that may end up increasing your federal tax payout.

Tax credits in Rhode Island
For those who have recently graduated from college, there are tax credits offered, which is the loan amount the student has to pay for that year. That can be claimed for four years. However, this credit can be claimed for those who work for an employer who deals in sectors like life science, engineering, computer science, advanced maths, finance, medicine, etc.

Rhode Island Income Tax Laws

Taxable income in Rhode Island
The following are the sources of income that are taxable:

  • Salaries
  • Wages
  • Dividends
  • Profits from stocks
  • Other sources of income

The following are sources of income that are exempt from taxation:

  • Child support
  • Alimony
  • Welfare
  • Some part of the retirement funds

Filing returns in Rhode Island
You can file your Rhode Island tax returns online or can submit a printed return also by downloading the tax returns forms from the tax department website.

If a refund is due for you, then it would be sent to you. The website of the Division of taxations has an option, whereby you check the status of your refund. You need to fill your details like the social security number, the situation under which you have filed the return, and also the amount you are expecting as a refund. When you key in these details, your status will be displayed.


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