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scabbot
New Member

My RI tax credit (paid nonresident taxes to MA) is less than 3% of what I paid to MA - is that right?

Resident of Rhode Island with zero RI income.

Nonresident of Massachusetts, taxes withheld there (obviously).

My RI credit for taxes paid to another state is 2.92%. So... correct? Seems low, I thought RI was at least 5%.

Thanks folks!

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Accepted Solutions
DanielV01
Expert Alumni

My RI tax credit (paid nonresident taxes to MA) is less than 3% of what I paid to MA - is that right?

It depends.  When you work in a different state, your resident state will give you a credit for the tax you pay to the nonresident state.  However, they only give a credit up to the amount that they would tax the same income.  

So, let's say you earned 40K, and the Massachusetts tax on that is $2,000.  Potentially, you will get a $2,000 credit on your Rhode Island taxes.  However, RI only charges $1,000 on that same 40K.  Your credit will be $1,000, which brings your RI tax down to zero.  Rhode Island will not refund you the difference.

However, if RI tax on the same income is $2200, then you do get the full $2000 credit, and would have to pay the $200 difference to RI.

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1 Reply
DanielV01
Expert Alumni

My RI tax credit (paid nonresident taxes to MA) is less than 3% of what I paid to MA - is that right?

It depends.  When you work in a different state, your resident state will give you a credit for the tax you pay to the nonresident state.  However, they only give a credit up to the amount that they would tax the same income.  

So, let's say you earned 40K, and the Massachusetts tax on that is $2,000.  Potentially, you will get a $2,000 credit on your Rhode Island taxes.  However, RI only charges $1,000 on that same 40K.  Your credit will be $1,000, which brings your RI tax down to zero.  Rhode Island will not refund you the difference.

However, if RI tax on the same income is $2200, then you do get the full $2000 credit, and would have to pay the $200 difference to RI.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
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