Rhode Island Withholding laws & HR compliance analysis

Rhode Island Withholding: What you need to know

The Rhode Island withholding law requires employers in the state to withhold Rhode Island income tax from wages of residents for performing services both inside and outside the state and of nonresidents for service performed within the state. A "resident" is defined as anyone who is domiciled in the state or who spends 183 days of a tax year in the state. The definition of wages under Rhode Island's law is the same as for federal tax purposes. Employers must withhold state income taxes at the time of each wage payment. The amount to be withheld may be calculated using the percentage method provided by the Division of Taxation.
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Rhode Island does not require employers to obtain a separate certificate showing the number of dependents or other personal exemptions claimed by an employee. In computing both the federal withholding and the Rhode Island withholding for employees, the employer may rely on federal withholding exemption certificates (Form W-4). Employees electing additional federal withholding may elect additional Rhode Island withholding. Employees electing additional Rhode Island withholding should do so on Form RI W-4. Form RI W-4, which the employer is required to keep on file, should be completed by the employee at the beginning of employment or if he or she would like to adjust the amount of Rhode Island taxes being withheld from pay.
The additional amount of Rhode Island income tax withholding is entered on line 2 of Form RI W-4. Employers are not required to determine the correctness of the withholding allowance certificates and may rely on the number of state withholding exemptions claimed on the RI W-4 by the employee. Employees exempt from federal tax withholding because they ...

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