Rhode Island residents pay both federal and state income taxes, and they are also responsible for property taxes. Though Rhode Island’s property tax rates are high, the state does offer some opportunities for exemptions and tax breaks.
You are required by law to file both federal returns and state returns if you meet income thresholds. However, Rhode Island residents can benefit from filing returns at the state level because they may qualify for refunds or exemptions.
When filing state taxes in Rhode Island, it is essential to use the correct forms and to meet deadlines and due dates. Here is what you need to know to file taxes in Rhode Island. If you fail to do so, you may not qualify for exemptions and refunds, and you could have to pay penalties.
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Rhode Island Income Tax
Until 2011, Rhode Island residents paid relatively high income taxes. The highest state income tax rate was 9.9%. However, the state changed its tax rules significantly in 2011, and these sweeping changes brought the highest state income tax rate down to 5.99%.
The state has straightforward personal income tax rates. There are only three tax brackets, and the brackets are the same for taxpayers regardless of their filing status. However, there are different standard deductions for people depending on their filing status.
|Tax Rate||Taxable Income|
|3.75%||$0 to $62,550|
|4.75%||$62,551 to $142,150|
The tax brackets are the same for people of all tax filing statuses, but the amount of the standard deductions varies. Additionally, Rhode Island’s standard deductions are different than federal deductions. You need to make different calculations for each tax return.
|Tax Status||Standard Deduction|
|Married, filing jointly or qualifying widower||$17,050|
|Head of household||$12,800|
|Married, filing separately||$8,525|
Apart from the standard deduction, you also get a standard personal exemption of $4,000 for you and your dependents.
You also could qualify for other deduction options. For example, Stay Invested in RI Wavemaker Fellowship Tax Credits are for graduates who work in specific fields who remain in Rhode Island after graduation. The professions that qualify include engineering, medicine, medical device technology, commercial design, finance, advanced math, IT, environmental sciences, and natural sciences.
You can also set up a family education account and reduce your taxable income by the amount of your contributions to that account.
If your employer deducts taxes from your paycheck, you may qualify for a refund. If you do, you can use the Rhode Island Division of Taxation website to check the status of your refund.
Rhode Island Sales Tax
Rhode Island charges a sales tax of 7%, but there are no additional county or city sales taxes. The tariff covers most retail sales of goods or services. The vendor collects the tax at the point of sale and is responsible for submitting it to the state.
Some items are exempt from sales tax. These include everyday clothing, medication, medical supplies, and grocery and other non-prepared food items.
Sometimes, sales tax exemptions depend on who is buying the goods. For example, a merchant buying products for resale is exempt from sales tax. Other sales tax exemptions are available for nonprofits, religious institutions, and government agencies.
Rhode Island also collects use tax on items sold outside of Rhode Island but consumed or used in Rhode Island. This rule applies to remote or online sellers who send goods to customers in Rhode Island. The law seeks to create a level playing field for in-state retailers who have to pay sales tax.
Rhode Island Property Tax
Rhode Island has an effective property tax rate of 1.63%. The exact percentage varies depending on your property’s location. However, overall, Rhode Island has some of the most expensive property tax rates in the country.
Municipal assessors and collectors handle the assessment and administration of personal property taxes, and you can find out about the exact tax rates for your municipality at the Rhode Island Department of Revenue’s website.
Rhode Island Inheritance and Estate Taxes
Inheritance tax is different from estate tax. Inheritance tax is paid by the beneficiary of an inheritance on any personal property they receive from the deceased. An estate tax, on the other hand, is levied on the estate of the deceased before it is split among any heirs. The estate tax is often paid from the estate itself.
Rhode Island does not charge an inheritance tax, but does charge an estate tax. However, many estates are exempt from this tax. Rhode Island estates get a tax credit if their value is less than $1,579,922. Though you do not have to pay taxes, you do need to file Form RI-100 to claim this credit.
Other Taxes in Rhode Island
Rhode Island allows individuals to write off amounts they donate to qualified charitable organizations. These include different charities such as the state council on the arts, the state organ transplant fund, childhood disease victims fund, military family relief funds, and others.
Rhode Island residents also pay excise taxes on products such as alcohol, cigarettes, and gas. Currently, the gas tax is $0.34 per gallon. The state also has a $0.01 per gallon environmental tax. The federal gas tax of $0.184 per gallon also applies. Therefore, the total tax on a gallon of gas in Rhode Island is $0.534.
In addition to sales tax, Rhode Island has an excise tax on alcohol and cigarettes.
Filing Taxes in Rhode Island
You must file your state and federal tax returns in Rhode Island by April 15. When the 15th falls on a weekend or holiday, the due date will be the next business day after the 15th. In case you can’t complete and submit your returns on time, you can file Form RI-4868 by the original due date to get a six-month extension.
It’s simple to track your returns and refunds via the Rhode Island Division of Taxation. You can also file both your federal and state returns for free online in Rhode Island. If you would like more information about the due date for various tax documents, you can visit the Rhode Island Division of Taxation’s website.
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