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 top income tax rate of 5.99% is close to the nationwide average. No cities in the state levy local income taxes.
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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
Rhode Island Paycheck Quick Facts
- Rhode Island income tax rate: 3.75% - 5.99%
- Median household income: $63,296 (U.S. Census Bureau)
- Number of cities that have local income taxes: 0
How Your Rhode Island Paycheck Works
It’s difficult to predict your exact take-home pay because your employer removes certain taxes from your paychecks. 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. Your employer will withhold 6.2% of your wages in Social Security tax and 1.45% in Medicare tax. Your employer then matches your contribution, so the total amount paid to Social Security and Medicare is double what you paid. Keep in mind, though, that 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, marital status and whether you list any dependents on your Form W-4. The information you put on your W-4 is how your employer knows how much to withhold from your paychecks. That’s why all of your employers (if they withhold taxes) will require you to fill out a W-4. You should also update your W-4 anytime you experience a big life change, like getting married or having a child.
Note that withholding information for federal income taxes changed for 2018 because of President Trump's new tax plan that was signed into law in 2017. If the plan caused any changes to your paychecks, you should have seen them in early 2018. If you didn’t notice a change or you aren’t sure of the changes, double-check that the information in your W-4 is still correct.
While there weren't any changes to the W-4 in 2019, the IRS made major revisions to the 2020 version. More specifically, the new form no longer uses allowances, alternatively requiring filers to enter annual dollar amounts for things such as non-wage income, total annual taxable wages, income tax credits and itemized and other deductions. The form also utilizes a five-step process that lets filers indicate any additional income or jobs. While all employees hired as of Jan. 1, 2020, must complete the form, those hired before then aren't required to unless they change jobs or adjust their withholdings in 2020.
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 may pay a higher rate. There are three tax brackets and they are the same for all taxpayers regardless of filing status. The first $64,050 of Rhode Island taxable income is taxed at 3.75%. Taxable income between $64,050 and $145,600 is taxed at 4.75%, and taxable income over that amount is taxed at 5.99%.
Rhode Island does not have any local income taxes.
If you're considering refinancing a property or purchasing a home in the state, 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 - $64,050||3.75%|
|$64,050 - $145,600||4.75%|
A financial advisor in Rhode Island can help you understand how taxes fit into your overall financial goals. Financial advisors can also help with investing and financial plans, including retirement, homeownership, insurance and more, to make sure you are preparing for the future.
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 method involves contributing money to pre-tax accounts, such as a health savings account (HSA), 403(b) or 401(k). When you contribute funds to these accounts, it is done on a pre-tax basis, meaning you're actually reducing your taxable income. While all employers don't offer these, you should consider using them if your employer does.
You may also want to consider having a dollar amount withheld from each of your paychecks to go toward your taxes. On the W-4, there is a line where you can write in any additional money that you’d want your employer to withhold from each paycheck. Yes, this will make your paychecks smaller, but you'll be spreading out your tax burden over the entire year instead of underpaying and then owing money during tax season.
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 2017 5-Year American Community Survey, MIT Living Wage Study, Bureau of Labor Statistics