1. Starting in 2020, Rhode Island has an individual mandate to have health insurance coverage, or pay the shared responsibility payment for lack of coverage.
a. Healthsource Rhode Island (HSRI) will be sending forms to individuals who have bought coverage.
b. They are expecting employers and insurance carriers to continue to send Forms 1095 B and C
c. The penalty is based on law before the 2017 Tax Reform
d. They will reduce any Rhode Island refund by the amount of the penalty. They are considering whether to assess the penalty if the proper form is not attached to the return.
2. Rhode Island Division of Taxation (RIDivTax) Portal is live
a. Taxpayers can make payments; look at their payment history; file tax returns online; apply for a letter of good standing; have a compliance check; and respond to notices. Individual and business returns can’t be filed using the portal. Documents can be uploaded to resolve notices and send additional information for letter of good standing requests.
b. Taxpayer interested in using the Portal who have not already received a PIN letter in the mail must call 401-574-8484 or email email@example.com to have a PIN mailed to them.
c. The tax professional registers on the Portal and establishes a username. The tax professional then gives the username to the taxpayer and the taxpayer links the tax professional to his/her account to allow the tax professional to have access to the taxpayer account. The taxpayer can limit the tax professional’s access to only portions of the Portal information.
d. RIDivTax has a PIN letter campaign. It recently sent 8,000 letters to taxpayers informing them of the new Portal. The letters went to those taxpayers using RI.GOV. Additional letters will be sent to registered businesses and taxpayers.
e. The Portal does not allow credit card payments. The payments would come from th taxpayer’s bank account. RI.GOV does allow payments to be made using credit cards. However, RI.gov will be shut down in the future.
f. There are information training sessions on October 18, 2019 and November 12, 2019 at the RIDivTax. The sessions should last 1 hour.
3. Rhode Island 1041 is eligible to be efiled starting this year. Software providers can decide if they want to change their software to allow for efiling the RI 1041.
4. In 2021, Rhode Island is changing from an annual sales tax reconciliation to monthly reconciliations.
5. Pass through entity tax
a. They are looking at whether to allow estimated tax payments made by the taxpayer as a credit against the entity level tax. If they do allow it, they would not transfer the estimated tax payments to the pass through entity account.
b. They will not apply any nonresident withholding estimated tax payments against the pass through entity tax. The nonresident withholding is an owner payment but the pass through entity tax is a tax on the entity.
c. Reminder that the pass through entity tax apples to Schedule C filers and other pass through entities.
d. The pass-through entity tax is optional. A lot of discussion about whether the federal will allow the deduction or not. Still an open issue with IRS indicating they will issue guidance.
e. Any over-payment of the pass through entity tax would be allocated to the owners of the entity. The over-payment would not be refunded or applied to future years.
We will be happy to discuss any of the information provided in more detail. Please contact us at 401-831-0200.