PROVIDENCE – The R.I. Division of Taxation released a remainder last week on upcoming changes to tax policy that take effect Jan. 1, 2018.
The division highlighted five tax changes in a release, including changes to estimated taxes, unemployment insurance tax, temporary disability tax, estate tax and interest rates.
“These changes apply for tax years beginning on or after Jan. 1, 2018,” said Tax Administrator Neena S. Savage in a statement. “They do not affect returns that businesses and individuals will file over the next few months, covering the 2017 tax year.”
Estate tax
The Rhode Island estate tax credit increased from $65,370 to $66,810 in 2018 for decendents dying on or after Jan. 1, 2018.
The estate tax threshold in the state will therefore be $1,537,656, an increase from 2017’s $1,515156. Any estate with a net taxable value below the threshold would not be subject to the state estate tax.
Estimated taxes
The R.I. General Assembly voted to change the corporate estimated tax collection in the state from its current collection (40 percent on March 15 and 60 percent on June 15) to four equal payments spread over the course of a year.
The first quarter payment (25 percent of the total tax) will be due on April 15, the second payment will be due by June 15. The third payment will be due on Sept. 15 and the final payment will be due on Dec. 15.
Interest rates
The interest on overpayments in the 2018 calendar year has increased from 3.5 percent to 4.25 percent. Underpayments will remain at 18 percent.
However, delinquent payments are eligible to be paid under the terms of the state’s amnesty program through Feb. 15, 2018.
Temporary Disability Insurance tax
The TDI taxable wage base increases fro $68,000 to $69,300 in the 2018 tax year, while the TDI tax rate declines from 1.2 percent to 1.1 percent.
The state also lowered its TDI minimum tax from $817.20 to $762.30.
Unemployment tax
The state’s unemployment insurance tax wage base has increased from $22,400 to $23,000 from 2017 to 2018 for most employers. The UI tax rate range also decreased from 0.99-9.59 percent to 0.89-9.49 percent.
Employers are expected to save a collective $10 million due to the change in 2018.
Chris Bergenheim is the PBN web editor.
