Effective January 1, 2020, Rhode Island will be implementing two significant changes to withholding tax obligations. For certain taxpayers, electronic filing will be mandatory and filing frequencies will be reduced.
The “weekly” frequency for submitting withheld tax to the Division of Taxation will replace the current “quarter-monthly” and “daily” frequencies. A week will be defined as beginning on Sunday and ending on Saturday. All payroll occurring in each week will be due on the business day following the end of the week.
Additionally, for purposes of the filing of a withholding return, the Division of Taxation will develop a new version of Form RI-941, to be due on a quarterly basis. All taxpayers, regardless of how often an employer must remit withholding tax, will submit their returns once a quarter – on the last day of the month following each quarter, with the first due date of April 30, 2020.
Every employer that’s required to deduct and withhold Rhode Island personal income tax – and that had an average tax amount of $200 or more per month for the previous calendar year – must file a return and remit the payments electronically. Such employers who fail to do so will be subject to a penalty, 5% of the withheld tax payment that was not filed electronically, or $500, whichever is less (unless there was reasonable cause for the failure – and the failure was not due to negligence or willful neglect). If any person fails to file a return by electronic means, there will be added to the amount of tax a sum equal to $50 (unless there was reasonable cause for the failure and the failure was not due to negligence or willful neglect).