August 19, 2021
Rhode Island extends COVID-19 income tax withholding guidance for teleworkers
The Rhode Island Division of Taxation announced that it has extended through September 15, 2021 (previously extended through July 17, 2021) emergency regulations that temporarily waive the requirement that employers withhold Rhode Island state income tax from the wages of employees 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. (See 14.6(B) of 280-RICR-20-55-14.)
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. (See 14.7(B) of 280-RICR-20-55-14.)
Limitations of the emergency regulations
The emergency regulations under 280-RICR-20-55-14:
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