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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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.
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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