Overview of Rhode Island Taxes
Rhode Island has a progressive state income tax system with three tax brackets. The tax rates vary by income level but are the same for all taxpayers regardless of filing status. Rhode Island’s income tax rates are fairly close to the nationwide average. No cities in the state levy local income taxes.
This calculator reflects the 2018 federal withholding tax changes.
Click here to learn more about how the Trump Tax Plan will affect you.
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- Our Tax Expert
Jennifer Mansfield, CPA Tax
Jennifer Mansfield, CPA, JD/LLM-Tax, is a Certified Public Accountant with more than 30 years of experience providing tax advice. SmartAsset’s tax expert has a degree in Accounting and Business/Management from the University of Wyoming, as well as both a Masters in Tax Laws and a Juris Doctorate from Georgetown University Law Center. Jennifer has mostly worked in public accounting firms, including Ernst & Young and Deloitte. She is passionate about helping provide people and businesses with valuable accounting and tax advice to allow them to prosper financially. Jennifer lives in Arizona and was recently named to the Greater Tucson Leadership Program.
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Rhode Island Paycheck Calculator
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Rhode Island Paycheck Quick Facts
How Your Rhode Island Paycheck Works
Whether you work at Hasbro or Brown University, trying to predict your Rhode Island paycheck after a change in income often proves to be difficult. During the tax year you are subject to having FICA, federal and state income taxes withheld from your pay.
Each pay period, you'll see money come out of your paycheck for Social Security and Medicare taxes. These make up FICA (Federal Insurance Contributions Act) taxes, and your employer will withhold 6.2% of your wages in Social Security tax and 1.45% in Medicare tax. Your employer matches your contribution, so the total amount paid to Social Security and Medicare is doubled. Keep in mind, if you are self-employed, you will have to pay the entire contribution yourself. Additionally, if you earn in excess of $200,000, your wages over that amount are subject to a 0.9% Medicare surtax, which employers do not match.
How much you pay in federal income taxes depends on factors like your income level, your marital status and how many allowances you claim on your W-4 form. Every time you start a new job or undergo a major life change like having a baby or getting married, you’ll need to fill out a new W-4. The information you provide on this form lets your employer know how much to withhold in taxes.
Withholding information for federal income taxes has changed for 2018 because of President Trump's new tax plan. The IRS released new withholding guidelines in January and taxpayers should have seen changes to their paychecks, to reflect the new tax plan, starting in February 2018. For the time being, you do not need to fill out a new W-4. Your employer will use the withholdings on your current form.
Additionally if you opt into employer-sponsored benefits like health and life insurance or 401(k) or 403(b) retirement accounts, the money you pay toward those is deducted from your wages.
Rhode Island Median Household Income
|Year||Median Household Income|
Rhode Island has a progressive state income tax system, meaning residents who earn more pay more in taxes. There are three tax brackets and they are the same for all taxpayers regardless of filing status. The first $61,300 of Rhode Island taxable income is taxed at 3.75%. Taxable income between $61,301 and $139,400 is taxed at 4.75%, and taxable income over that amount is taxed at 5.99%.
Rhode Island does not have a local income tax in any of its cities. This is good news for your paycheck as it means that whether you live in Providence, Newport or anywhere in between, you won't have to pay additional local income taxes. And if you're considering refinancing a property or purchasing a home in the state, regardless of where, check out our Rhode Island mortgage guide for important information about rates and getting a mortgage in the Ocean State.
Income Tax Brackets
|Rhode Island Taxable Income||Rate|
|$0 - $61,300||3.75%|
|$61,300 - $139,400||4.75%|
How You Can Affect Your Rhode Island Paycheck
Although you can’t have full control over all aspects of your paycheck, there are ways in which you can affect your take-home pay. One way is simply how you complete your W-4 form. How many allowances you claim on this form plays a big role in the size of your paycheck. Claiming more allowances means more of your income goes into your pocket throughout the year. This means you have more funds available for building up your savings or investments instead of having to wait for your tax refund at the end of the year.
However, it's worth noting that opting for more allowances comes with its own set of risks and drawbacks. Having less of your income withheld for taxes throughout the year not only lowers your likelihood of receiving a refund, but it also creates the possibility of owing money to the IRS in April if you haven't paid enough in taxes all year.
If you're someone who can't stand the thought of having to pay a lump sum in April, claiming more allowances may not be the best option for you. Instead, you may want to consider claiming fewer allowances when filling out your W-4 Form. You may also want to consider having a dollar amount withheld from each of your paychecks to go toward your taxes. Admittedly, your paychecks will be smaller, but you'll be spreading out your tax burden over the entire year and you'll be more likely to avoid owing the IRS come April.
Rhode Island Top Income Tax Rate
|Year||Top Income Tax Rate|
Most Paycheck Friendly Places
SmartAsset's interactive map highlights the most paycheck friendly counties across the country. Zoom between states and the national map to see data points for each region, or look specifically at one of the four factors driving our analysis: Semi-Monthly Paycheck, Purchasing Power, Unemployment Rate, and Income Growth.
Methodology Our study aims to find the most paycheck friendly places in the country. These are places in the country with favorable economic conditions where you get to keep more of the money you make. To find these places we considered four different factors: semi-monthly paycheck, purchasing power, unemployment rate and income growth.
First, we calculated the semi-monthly paycheck for a single individual with two personal allowances. We applied relevant deductions and exemptions before calculating income tax withholding. To better compare withholding across counties we assumed a $50,000 annual income. We then indexed the paycheck amount for each county to reflect the counties with the lowest withholding burden.
We then created a purchasing power index for each county. This reflects the counties with the highest ratio of household income to cost of living. We also created an unemployment rate index that shows the counties with the lowest unemployment. For income growth, we calculated the annual growth in median income over five years for each county and indexed the results.
Finally, we calculated the weighted average of the indices to yield an overall paycheck friendliness score. We used a one half weighting for semi-monthly paycheck and a one-sixth weighting for purchasing power, unemployment rate and income growth. We indexed the final number so higher values reflect the most paycheck friendly places.
Sources: SmartAsset, government websites, US Census Bureau 2016 5-Year American Community Survey, MIT Living Wage Study, Bureau of Labor Statistics