Tax changes for the new year

The Rhode Island Division of Taxation today posted a summary of key tax changes that will take effect on Thursday. 

The summary focuses on changes to the Rhode Island corporate income tax and the Rhode Island estate tax.

Increase in Section 179 limits

Rhode Island Tax Administrator David M. Sullivan today issued a reminder to tax practitioners and others that the new federal limits involving the Section 179 deduction for business assets also apply for Rhode Island tax purposes. 

That is because of legislation that was approved by the General Assembly and signed into law by Governor Lincoln D. Chafee in July 2013, linking federal and Rhode Island law for purposes of Section 179 expensing.

Withholding certificate for 2015

The Rhode Island Division of Taxation has posted on its website the 2015 version of Form RI W-4, the employee's withholding allowance certificate. Employees use the form to adjust the amount of Rhode Island personal income tax that is withheld from their paychecks. To view a copy, click here.

Booklet of withholding tables posted

The Rhode Island Division of Taxation has posted on its website the booklet of withholding tables for tax year 2015. Employers use the tables to figure out how much to withhold from an employee’s pay for Rhode Island personal income tax purposes. To view a copy, click here.

Tax credit poster available in Spanish

The Division of Taxation today issued a Spanish language version of a new poster that highlights key changes to the property-tax relief credit program for the coming tax-filing season.

The poster, which can also serve as a leaflet or flier, is mainly intended as an aid to preparers for the filing season which starts in January 2015. The credit is claimed on Form RI-1040H. To view the poster, click here. To learn more about the poster, click here.

Poster summarizes tax credit changes

A new poster from the Rhode Island Division of Taxation highlights key changes to the property-tax relief credit program for the coming tax-filing season. The poster, which can also serve as a leaflet or flier, is mainly intended as an aid to preparers for the filing season which starts in January 2015.

"Paid preparers and volunteer preparers may find this poster useful to help explain the changes to clients, some of whom may not be aware of the changes," said Rhode Island Tax Administrator David M. Sullivan.

Taxpayers may find that the poster provides a brief, helpful reminder of the changes, Sullivan said. The changes involve the statewide property-tax relief credit, which is claimed on Form RI-1040H. The credit amount has increased for tax year 2014, and eligibility rules have tightened. Although the changes were enacted in June 2014, most taxpayers will not encounter them until the 2015 filing season (which covers tax year 2014).

Corporate tax - comment period extended

The Rhode Island Division of Taxation on November 25, 2014, posted two documents involving the corporate income tax: 

• a draft regulation on combined reporting, and
• a draft statement of principles on the application of corporate tax changes.

Comments on those working drafts, also known as exposure drafts, were initially due December 8, 2014. However, in response to requests from multiple stakeholders, Tax Administrator David M. Sullivan today extended the due date for comments to December 22, 2014. “This is a busy time of year, and these are complex documents that take time to review,” Sullivan said. “We want to give stakeholders ample time to reflect on the documents and provide us with their valuable input.”

To view the documents, please click here.

Inflation-adjusted amounts for 2015

The Rhode Island Division of Taxation today posted inflation-adjusted amounts for tax year 2015. Among the items that have been adjusted are:

• standard deduction amounts;
• personal exemption and dependency amounts;
• the deduction and exemption phase-out range; and
• tax bracket ranges.

For details, please click here.

Task force launches tip line

A six-agency task force that includes the Rhode Island Division of Taxation announced today that it has set up an anonymous telephone tip line to receive allegations of worker misclassification.

The tax fraud tip line is staffed by the Division of Taxation. The tip line number is (401) 574-TIPS or (401) 574-8477. 

"By using the tip line, workers and others can let us know about employers who are misclassifying workers as independent contractors," said Rhode Island Tax Administrator David M. Sullivan. 

"Rest assured that we will follow up on all tips. Businesses that don't play by the rules end up increasing the tax burden on those businesses that do play by the rules. By enforcing our laws, we can help to level the playing field — and that helps everyone, including employers and employees," Sullivan said.

The task force was established to protect workers' rights as well as law-abiding businesses that properly classify their employees.  Click here to read today's announcement about the tip line and the task force.

Seminar for tax preparers

The Rhode Island Division of Taxation this morning held a three-hour seminar for tax preparers. The session was held at the Community College of Rhode Island campus in Warwick. More than 100 preparers attended. The seminar focused in part on what's new for the coming filing season and for tax year 2015. 

"We're grateful to CCRI for having been so gracious in allowing us to use its facilities at the Newport campus last month and at the Warwick campus this morning,” said Rhode Island Tax Administrator David M. Sullivan. “We’re also thankful to the many preparers who attended the seminar. Filing season starts next month, so it helps for all of us to get a head start," Sullivan said.

Division of Taxation seminar at CCRI's Warwick campus