rhode island tax news - Rhode Island Division of Taxation - RI.gov

A NEWSLETTER FOR TAXPAYERS AND PRACTITIONERSPAGE 3WHAT’S NEW FOR 2012 TAX YEAR (CONTINUED FROM PAGE 2)The Tax Division has alsoadjusted upward the incomeranges in the 4.75 percentand 5.99 percent brackets.Had all the figures remainedconstant, you might bebumped into a higher bracket– and pay more in tax – solelybecause of an annual wageincrease that was intended tohelp you keep pace with inflation,an outcome known asFIDUCIARY bracket creep. UPDATE:To help offset the effects ofbracket creep, the GeneralAssembly included in RhodeIsland tax law a provision thatrequires the tax brackets (aswell as standard deductionand personal and dependencyexemption amounts, and thephase-out range) to be adjustedannually with inflation.(Click here for more about inflationadjustments made by the TaxDivision for 2012.)Tax on LPs, LLPsNew for 2012, some businessentities will each have topay an annual tax – a filing fee– of $500.It’s an amount that’s equalRhode Island personal income tax:rate schedule for 2012Over But not over Pay+ percenton excessto Rhode Island’s annualcorporate minimum tax.The annual tax, whichalready generally appliesto many limited liabilitycompanies, S corporations,and others, willexpand its scope in taxyear 2012 to include LPsof the amountover$ 0 $ 57,150 $ ---- 3.75% $ 057,150 129,900 2,143.13 4.75% 57,150129,900 ---- 5,598.75 5.99% 129,900MAXIMUM TDI TAX IS REDUCED BY 5.2% FOR 2012The maximum amount ofRhode Island TemporaryDisability Insurance (TDI)tax will be lower for 2012,the result of changes to keyfigures in the TDI tax formula.As a consequence,some workers will see a 5.2percent drop this year inthe total amount of TDI taxwithheld from their paychecks.The TDI tax has two maincomponents: the tax rateitself, and the amount ofyour wages to which thattax rate applies (the taxablewage base). For 2012, thetaxable wage base will increaseby $1,600, or 2.7percent, to $60,000. Butthe tax rate will drop, to1.2 percent from 1.3 percent.As a result, the maximumTDI tax for 2012 will dropto $720 (the tax rate of 1.2percent applied to $60,000of wages.) For 2011, themaximum TDI tax was$759.20 (the tax rate of 1.3percent applied to $58,400of wages). Whether theamount of your TDI taxgoes up or down will generallydepend on how muchyou earn.TDI tax is paid exclusivelyby workers. The TDI pro-and LLPs.The law also makes itclear that any limitedliability company (LLC)that is not taxed as a corporationfor federal andRhode Island tax purposesmust pay the annual$500 tax.gram is administered by theRhode Island Department ofLabor and Training. TDI taxis collected by the Rhode IslandDivision of Taxation. In2011, about 391,500 workerscontributed to the TDI fund.In general, TDI benefits arefor those out of work becauseof injury or illness unrelatedto work.(For more news about TDI,please see page 13.)TDI at a glance 2007 2008 2009 2010 2011 2012Tax rate: 1.3% 1.3% 1.5% 1.2% 1.3% 1.2%Taxable wage base: $ 52,100 $ 54,400 $ 56,000 $ 57,900 $ 58,400 $ 60,000Maximum annual tax: $ 677.30 $ 707.20 $ 840.00 $ 694.80 $ 759.20 $ 720.00