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In ADV 2021-11, the Rhode Island Division of Taxation announced that it has extended through July 17, 2021 (previously extended through May 18, 2021), emergency regulations that temporarily waive the requirement that employers withhold Rhode Island state income tax from the wages of employees temporarily working within the state solely due to COVID-19. The emergency regulations took effect on March 9, 2020. (See history section of 280-RICR-20-55-14 for the revised termination date.)

Nonresident individuals employed by a Rhode Island employer and temporarily working remotely outside of Rhode Island

The Division treats the wages of nonresident employees temporarily working outside of Rhode Island solely due to the COVID-19 state of emergency as subject to Rhode Island income tax and withholding. The Department reserves the right to review this determination based on the facts and circumstances of individual cases.

Example: A resident individual from State A works for a Rhode Island employer, normally performs his or her tasks within Rhode Island, and has wages that are subject to Rhode Island income tax withholding. If the employee is temporarily working within State A solely due to COVID-19, the employer should continue to withhold Rhode Island state income tax because the employee's work is derived from or connected to a Rhode Island source.

Resident individuals employed by an employer outside of Rhode Island and temporarily working remotely within Rhode Island

The Division will not require employers located outside of Rhode Island to withhold Rhode Island state income tax from the wages of Rhode Island resident employees who are temporarily working within the state solely due to the COVID-19 state of emergency.

Example: A Rhode Island resident individual works for an employer in State B, normally performs his or her tasks within State B, and has wages that are subject to State B income tax withholding. If the employee is temporarily working within Rhode Island solely due to the COVID-19 state of emergency, the employer will not be required to withhold Rhode Island state income tax from this employee's wages for the duration of the COVID-19 state of emergency.

Limitations of the emergency regulations

The emergency regulations under 280-RICR-20-55-14:

• Apply to employers whose employees are temporarily performing remote work outside of Rhode Island solely because of the ongoing COVID-19 state of emergency
• Do not apply to employers outside of Rhode Island that, prior to March 9, 2020, were withholding Rhode Island income tax from the wages of their employees working remotely within Rhode Island
• Do not apply to employers in Rhode Island that, prior to March 9, 2020, were withholding another state's income tax from the wages of employees working remotely in that other state
• Do not apply in situations where the employer and its employees, albeit working remotely, are situated in the same state; in that event, the Rhode Island personal income tax and withholding requirements continue to apply
• Do not apply to payments required to be made under the Rhode Island Employment Security Act (Titles 28-42, 28-43, and 28-44 of the General Laws), the Rhode Island Temporary Disability Insurance Act (Titles 28-39 and 28-40 of the General Laws), or the Job Development Assessment (Section 28-43-8.5)

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