The Rhode Island Division of Taxation (DOT) has announced withholding changes for the 2020 calendar year that payroll professionals should be aware of. Effective January 1, 2020, there will be a new weekly deposit frequency, all employers must file quarterly withholding returns, and certain employers must electronically file returns and make payments [DOT, Advisory for Tax Professionals 2019-28,10-25-19].
New Weekly Deposit Frequency
Effective January 1, 2020, a new weekly deposit frequency for withholding taxes will replace the current quarter-monthly (within three banking days after the close of the quarter-monthly period) and daily (next banking day) deposit frequencies. There are no changes for employers that deposit monthly (withhold at least $50 but less than $600 per calendar month) and quarterly (withhold less than $50 per calendar month).
Under the new weekly deposit frequency requirement, a week begins on Sunday and ends on Saturday. All payroll occurring in a given week will be due on the business day following the end of the week (i.e., on the Monday after payroll is paid, or Tuesday if Monday is a recognized holiday).
Quarterly Withholding Returns Must Be Filed
The DOT is separating an employer’s deposit frequency from its filing frequency and developing a new version of its Form RI-941. Effective January 1, 2020, a withholding return will be due quarterly from all employers, regardless of deposit frequency. Returns will be due on the last day of the month following each quarter, with first quarter returns due on April 30, 2020.
Electronic Filing and Payment Requirements
Effective January 1, 2020, employers that are required to withhold Rhode Island income tax and that had an average tax amount of $200 or more per month for the previous calendar year must file withholding returns electronically and make payments via electronic funds transfer (EFT) or other electronic means as defined by the DOT. Currently, EFT is required if an employer has 10 or more employees during the lookback period (previous calendar year).
There are several methods for employers to make electronic payments: via the DOT Taxpayer Portal, EFT, and debit or credit card.
Look for DOT Notices in November and December
Employers that are required to file returns and pay electronically will receive a notice from the DOT in November. All employers will receive a “Withholding Account Summary” notice from the DOT in December, letting them know the due dates for paying withheld taxes and filing returns for the 2020 calendar year.
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Lia Coniglio, Esq., is Managing Editor of PayState Update and Manager of State Payroll Information Resources for the APA.
