In response to recent guidance from the Internal Revenue Service (Notice 2020-75), the Rhode Island Division of Taxation provides the following information about the effect of that guidance as it relates to Rhode Island’s elective entity-level tax on pass-through entities (“PTE election”).
The Division of Taxation, pursuant to Rhode Island General Laws § 44-1-10 and Regulation 280-RICR-20-55-1, will not assess underestimated payment interest for those entities that make the PTE election for the first time in the 2020 tax year and have not made estimated payments throughout the 2020 tax year. Please note: If a taxpayer made the election in 2019 and 2020 and failed to make sufficient estimated payments in 2020, that taxpayer would be subject to the underestimated payment interest, as the recent guidance from the IRS did not affect that taxpayer.
