Rhode Island Tax and CPA Services: State, County and City Taxes

Rhode Island is small, but its tax rules have features worth knowing: an individual health insurance mandate enforced on the state return, an employee-funded disability program, and a tax amnesty that opens in December 2026. This page covers tax year 2025 returns (filed in 2026) and 2026 planning for people and businesses with a Rhode Island connection.

Income tax for 2025

The Division of Taxation's 2025 worksheet applies one rate schedule to every filing status, and the brackets are inflation-adjusted each year:

You are a Rhode Island resident if you are domiciled here, or if you keep a permanent home here and spend more than 183 days of the year in the state. Residents are taxed on all income, and nonresidents only on Rhode Island sources. Residents who pay another state's income tax can claim a credit, using Form RI-1040MU when several states are involved. Rhode Island residents who work in Massachusetts or Connecticut generally file in both states and claim that credit.

For 2025, taxpayers at full retirement age can subtract taxable Social Security income, subject to federal AGI limits in the Division's worksheet. A separate modification of up to $50,000 applies to certain pension and annuity income for people at full retirement age who were born on or before March 1, 1959, with federal AGI of $107,000 or less (single) or $133,750 or less (joint).

Decoupling from H.R. 1

Rhode Island's FY 2026 budget decoupled from some provisions of the federal law enacted July 4, 2025. For 2025, the resident return adds a Schedule HR1 to add back the federal business interest deduction under section 163(j), research expense amortization under section 174A, added section 179(b) expensing and the section 181 sound recording deduction. The Division has posted advisories and emergency regulations, so expect Rhode Island taxable income to differ from the federal figure.

Health coverage on the state return

Rhode Island's health insurance mandate took effect January 1, 2020. Residents need qualifying coverage, and a lapse can cause a penalty calculated on Form IND-HEALTH and the Shared Responsibility Worksheet.

Corporate minimum tax and the pass-through election

The Rhode Island corporate income tax is 7% of taxable income, with a single sales factor and combined reporting. Every corporation with Rhode Island activity owes a minimum tax, and most pass-through entities except general partnerships owe the same $400 minimum (2026).

Pass-through entities must withhold on nonresident owners at the highest rate, which is 5.99% for individuals in 2026. Alternatively, nonresident owners can join a composite return, or the entity can elect since 2019 to pay tax at the entity level at 5.99%. Owners then receive a credit and add the payment back as a modification. Such elections are commonly used as a SALT-cap workaround; see our SALT deduction guide first.

LLCs, corporations and partnerships file an annual report with the Secretary of State, starting the calendar year after registering. The LLC window is February 1 to May 1, with a $50 filing fee in 2026.

Sales and meals taxes

The 2026 sales and use tax is 7%, and the local meals and beverage tax adds 1% on taxable food sales. Rhode Island is a Streamlined Sales Tax member state with a remote seller law, and out-of-state vendors with activities here, such as delivery or solicitation, may need a permit. Our sales and use tax service covers multistate sellers.

Payroll in Rhode Island

Employers withhold from wages for work performed here and learn their deposit schedule from a Withholding Account Summary notice each December. Unemployment and disability taxes are no longer handled by the Division of Taxation: the Employer Tax Unit moved to the Department of Labor and Training in April 2022. For 2026, the taxable wage base for unemployment insurance is between $30,800 and $32,300 per employee, depending on the employer's rate schedule.

Temporary Disability Insurance (TDI), which includes Temporary Caregiver Insurance, is funded entirely by employee payroll deductions. Rhode Island created the first state TDI program in 1942. Out-of-state companies with Rhode Island employees must register with the Employer Tax Unit. See state paid family and medical leave and state unemployment insurance.

Property tax and local rules

Local tax in Rhode Island is mostly about property. Each city and town sets its own rates, and the Division of Municipal Finance publishes tax rates and property tax cap reports. State law requires a statistical update in the third and sixth year and a full revaluation every nine years.

The 2026 tax amnesty

If you had delinquent Rhode Island taxes as of December 31, 2025, the amnesty waives 100% of penalties and cuts interest by 25% when you meet the program rules. All returns through December 31, 2025 must be filed first, and the Division will mail account statements in November. We can review whether it fits through our state tax representation work.

How we can help

We prepare RI-1040 and RI-1040NR returns, including part-year filings, handle the HR1 add-backs, and file pass-through returns and the entity-level election. For employers, our multi-state and local tax service and payroll support coordinate Rhode Island withholding, TDI deductions and registration.

Frequently asked questions

General information only, not tax, legal or accounting advice for your situation. Rules, limits and deadlines change; confirm the current rules with the official source or a qualified professional before you act. Reading this page does not create a professional relationship with CPA Tax Payroll and Accounting Corp.