Rhode Island Income Tax Rates & Brackets (Tax Year 2025 — Filed in 2026)

Remote Workers and Multi-State Taxation

Living in Rhode Island, Working for an Out-of-State Employer

As a Rhode Island resident, you owe Rhode Island income tax on all income, regardless of where your employer is located or where your employer is headquartered.

What this means:

• Employer location does NOT determine your Rhode Island tax obligation.
• Income from employers located in Massachusetts, Connecticut, New York, or any other state is fully taxable in Rhode Island if you are a Rhode Island resident.
• Your Rhode Island employer (if any) must withhold Rhode Island income tax (Form RI W-4). If your out-of-state employer does not withhold Rhode Island tax, you are responsible for making quarterly estimated payments (Form RI-1040ES).

Example: A Rhode Island resident working fully remotely from their Warwick home for a Boston-based Massachusetts employer owes Rhode Island income tax on all wages earned.

Source: https://tax.ri.gov/tax-sections/personal-income-tax/individual-tax-filing-requirements

Working in Rhode Island, Living in Another State

Nonresidents who perform work physically in Rhode Island owe Rhode Island income tax on income derived from Rhode Island sources.

Physical Presence Rule: Income is sourced to Rhode Island based on where the work is physically performed. A nonresident commuting to a Rhode Island job owes Rhode Island income tax on wages earned in Rhode Island.

Day-Count Allocation: Nonresidents who work partly in Rhode Island and partly in other states or from home must calculate the portion of their wages allocable to Rhode Island based on the number of days worked in Rhode Island versus total working days.

Source: Regulation PIT 97-15 (Employer’s Withholding) — https://tax.ri.gov/regulations/other/pit97-15.php

⚠️ Interstate Tax Risk Indicator

Rhode Island residents and workers commonly encounter multi-state tax complications with these states:

• Massachusetts — Massachusetts has historically applied a “convenience of the employer” rule during the COVID-19 emergency period; verify current Massachusetts policy at mass.gov.
• New York — Applies a strict “convenience of the employer” rule; Rhode Island residents working for New York employers may owe New York tax on days worked outside New York if work is done for personal convenience.
• Connecticut — Complex credit system for taxes paid to other states; border workers should review Connecticut sourcing rules.
• Pennsylvania — Over 2,500 local income tax jurisdictions; nonresidents working in Pennsylvania may owe local earned income tax in addition to state tax.
• California — Aggressive residency audits; extended stays in California while maintaining Rhode Island residency can trigger scrutiny.

Source: https://tax.ri.gov and IRS Publication 505

“Convenience of the Employer” Rule

Rhode Island does NOT apply a “convenience of the employer” rule.

As a result, Rhode Island nonresidents are taxed only on income from work physically performed in Rhode Island. If a Massachusetts resident works remotely from Massachusetts for a Rhode Island employer, that employee’s wages for days worked in Massachusetts are sourced to Massachusetts, not Rhode Island.

However, Rhode Island residents working for employers in New York or Massachusetts should confirm those states’ rules, as those states may tax wages on the convenience doctrine.

Source: RI Division of Taxation — https://tax.ri.gov/tax-sections/personal-income-tax/individual-tax-filing-requirements

Reciprocal Agreements

Rhode Island does not have reciprocal tax agreements with any other state.

This means:

• A Rhode Island resident who commutes to Massachusetts to work owes Massachusetts income tax on wages earned in Massachusetts AND owes Rhode Island income tax on all income (with a credit available for taxes paid to Massachusetts).
• A Massachusetts resident working in Rhode Island owes Rhode Island nonresident income tax on Rhode Island-source wages.

There is no exemption certificate available to avoid withholding in the work state based on residence. Workers in border situations must manage multi-state filing obligations individually.

Source: https://tax.ri.gov/tax-sections/personal-income-tax/individual-tax-filing-requirements

Multi-State Tax Filing

When earning income in multiple states as a Rhode Island resident:

1. File Form RI-1040 (Rhode Island resident return) reporting all income from all sources.
2. File nonresident returns in other states where income was physically earned.
3. Claim a credit on your Rhode Island return for income taxes actually paid to other states — this prevents double taxation on the same income.

Forms required:

• Schedule III (RI-1040, page 3) — Credit for taxes paid to one other state
• Form RI-1040MU — Resident Credit for Taxes Paid to Multiple States (when taxes were paid to more than one other state)
• Attach a signed copy of each out-of-state return for which you claim credit

Source: https://tax.ri.gov/forms/individual-tax-forms/personal-income-tax-forms (RI-1040MU)

Local Income Taxes

Rhode Island does not permit local income taxes.

Only the state-level Rhode Island income tax applies. Cities and towns in Rhode Island (including Providence, Cranston, Warwick, Pawtucket, etc.) do not impose local income taxes. No local income tax returns or local withholding applies.