How Much Is Income Tax in Rhode Island?

Rhode Island operates a state income tax system that applies to residents and non-residents earning income within the state. Understanding its structure, including rates, taxable income calculation, and provisions for deductions and credits, helps taxpayers determine their obligations.

Rhode Island Income Tax Rates

Rhode Island utilizes a progressive income tax rate structure. For the 2024 tax year, the state’s income tax rates apply uniformly across all filing statuses. The lowest tax rate is 3.75% for taxable income up to $77,450. Income between $77,450 and $176,050 is taxed at 4.75%. For taxable income exceeding $176,050, the highest marginal tax rate of 5.99% applies.

Determining Your Rhode Island Taxable Income

The starting point for calculating Rhode Island taxable income is your Federal Adjusted Gross Income (AGI). This AGI undergoes specific modifications, including additions or subtractions, detailed on Rhode Island Schedule M. For instance, certain federally untaxed income might be added back, while some income, such as a portion of Social Security benefits, may be subtracted. After these modifications, taxpayers can reduce their income by applying either the Rhode Island standard deduction or personal exemptions. Rhode Island does not allow taxpayers to itemize deductions; instead, they must claim the state’s standard deduction.

Available Deductions and Credits

Rhode Island taxpayers can reduce their tax liability through various deductions and credits. For the 2024 tax year, standard deduction amounts are $10,550 for single filers, $21,150 for married individuals filing jointly, $10,575 for married individuals filing separately, and $15,850 for heads of household. A personal exemption of $4,950 can be claimed for each qualifying dependent, including the taxpayer and their spouse. These deductions and exemptions may begin to phase out for taxpayers whose modified AGI exceeds $246,450.

Several tax credits directly reduce the amount of tax owed. The Rhode Island Earned Income Tax Credit (EITC) is equal to 16% of the federal EITC for the 2024 tax year. The Child and Dependent Care Tax Credit (CDCTC) amounts to 25% of the corresponding federal credit. A Property Tax Relief Credit, with a maximum amount of $675 for the 2024 tax year, is available to individuals aged 65 or older, or those with a disability, provided their household income does not exceed $39,275.

Who Must File in Rhode Island

An individual’s obligation to file a Rhode Island income tax return depends on their residency status and income level.

A “resident” is generally someone domiciled in Rhode Island or who maintains a permanent residence in the state and spends more than 183 days there during the tax year. If a resident is required to file a federal income tax return, they must also file a Rhode Island return. Even if not required to file federally, a resident must file a Rhode Island return if their income exceeds the combined sum of their Rhode Island personal exemptions and standard deduction.

“Non-residents” are individuals who do not meet the definition of a resident or part-year resident but have income derived from Rhode Island sources. Non-residents must file a Rhode Island return if they are required to file a federal income tax return and have income connected to Rhode Island sources, such as income from real property, a business, or services performed in the state.

A “part-year resident” is an individual who moved into or out of Rhode Island during the tax year. Part-year residents are required to file a return if they were a resident for less than 12 months and were required to file a federal return, reporting all income received while a resident and only Rhode Island-source income for the non-resident portion of the year.

Submitting Your Rhode Island Tax Return

Taxpayers submit their Rhode Island income tax return after calculating taxable income, deductions, and credits. The Rhode Island Division of Taxation encourages electronic filing, available through their portal or authorized software. Returns can also be submitted by mail.

Payment options include electronic funds transfer (EFT) directly from a checking or savings account, credit card payments (though a service fee may apply), or by sending a check or money order with the appropriate payment voucher. The general deadline for filing and paying Rhode Island personal income taxes is April 15. If an extension to file is granted, it typically extends the time to file the return but not the time to pay any taxes owed, meaning payment is still due by the original April 15 deadline.