Rhode Island Code of Regulations
Title 280 - Department of Revenue
Chapter 20 - Division of Taxation
Subchapter 55 - Personal Income Tax
Part 3 - Credit for Income Taxes of Other States (280-RICR-20-55-3)
Section 280-RICR-20-55-3.6 - Double Resident
Universal Citation: 280 RI Code of Rules 20 55 3.6
Current through September 18, 2024
A. General
1. A Rhode Island resident may be allowed a
credit for taxes due and paid to another state. Taxpayers claiming this credit
must file the RI-1040 Rhode Island resident return.
B. Double Resident
1. A person may be considered a resident of
this state for tax purposes even though maintaining a domicile in another
state.
2. A person acquires "double
residence" status when he/she is not domiciled in Rhode Island and is living in
a home they maintain in this state for more than 183 days of the tax year and,
therefore, meets the residency requirements of this state.
3. Rules for days within and without Rhode
Island:
a. In counting the number of days
spent within and without Rhode Island, a day spent within Rhode Island includes
any part of a day, except for a part of a day during which an individual is
present solely while in transit to a destination outside Rhode
Island.
b. An individual claiming
to be a nonresident who is not domiciled in Rhode Island but who has a
permanent place of abode in this state shall have records available for
examination by the Division of Taxation to substantiate the fact that such
individual spent 183 days or less within Rhode Island.
C. Out-of-State Tax Credit for "Double Resident"
1. A taxpayer who meets the
qualifications above and is therefore a "double resident" for both Rhode Island
and another state should complete computations of both states' tax liabilities
(before credits) and then follow these steps to determine the out-of-state
credit to be used on the Rhode Island return:
a. Add together the Rhode Island tax
liability (before withholding and credits) and the other state tax liability
(before withholding and credits).
b. Divide the Rhode Island tax liability by
the total tax liability from §
3.6(C)(1)(a) of this Part above.
c. Multiply the
percentage from §
3.6(C)(1)(b) of this Part by the lower state's tax. The resulting amount is the limitation
of the out-of-state credit.
d. The
actual amount of out-of-state tax credit will then be the smaller of the tax
liability of the other state or the amount of credit for taxes due and paid to
the other state as calculated in §
3.6(C)(1)(c) of this Part above.
2.
This special treatment and calculation of out-of-state tax credit for "double
residents" is only allowed if the other state also allows a similar reduction
in its tax for "double residents."
3. Example:
a. A person is domiciled outside Rhode Island
but is living in a home maintained by him in Rhode Island for more than 183
days of the tax year and, therefore, is considered a resident for the personal
income tax purposes of this state. The Rhode Island tax liability before any
withholding or credits is $800 and his tax liability to State X before
withholding or credits is $500. Computation of the credit to be allowed on the
Rhode Island filing for out-of-state taxes due and paid is as follows:
|
Rhode Island Tax Liability |
|
|
State X Tax Liability |
$800.00 |
|
Total Tax Liability |
$500.00 |
|
Rhode Island Tax Liability |
$1,300.00 |
|
Total Tax Liability |
$ 800.00 |
|
$1,300.00 = |
61.5% |
|
61.5% x $500 (the lower tax amount)= |
$307.50 |
|
This is the limitation on out-of-state credit. |
|
|
The out-of-state credit = the smaller of $307.50 (calculated above) or $500 (the tax liability to State X). In this case the actual out-of-state credit to be used by the taxpayer is $307.50. |
|
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