Article: 50451
Overview
If you are a Rhode Island resident and earned income in another U.S. state, you may qualify for a credit to avoid double taxation. This is done using Schedule II of the RI Individual Income Tax Return (RI-1040 or RI-1040NR). Below is a complete guide to eligibility, qualifying income, and how to enter this credit using tax software.
Who Can Claim the Credit?
You may claim this credit if all the following apply:
- You were a full-year resident of Rhode Island.
- You earned income that was also taxed by another U.S. state.
- You paid income tax to that other state (not just earned income there).
Note: This credit does not apply to:
- Taxes paid to local governments (e.g., NYC local tax)
- Taxes paid to foreign countries
What Types of Income Qualify?
Qualifying income includes, but is not limited to:
- Wages or salary
- Self-employment income
- Rental income
- Business income
To qualify:
- The income must be reported on both your RI return and the other state’s return.
- You must be personally liable for the tax paid to the other state.
How to Report
- Navigate to the State Taxes section on the left-hand side of the screen.
- Click the link: “I’d like to see the forms I’ve filled out or search for a form.”
- In the dropdown menu, select Rhode Island.
- Click on the Credits tab.
- Click on “Schedule II – Credit for Income Taxes Paid to Another State” to open the form.
- Enter all applicable information.
- Click ‘Save‘ once complete.
Additional Resources
Visit the official site for eligibility, coverage definitions, exemptions, and calculation details:
https://tax.ri.gov/sites/g/files/xkgbur541/files/2024-10/2024%201040R%20Instructions_d.pdf