By David Gobeille, Tax Partner

It appears that Rhode Island will have a sufficient level of reserves in our unemployment insurance trust fund as of September 30, 2016 that (under the new law) the state will be able to move to a lower tax schedule beginning January 1, 2017. This could mean potential payroll tax savings for Rhode Island employers.

RI has been on Schedule I since 1992, which is the highest tax rate schedule. The new law reduces the level of reserves that the trust fund must have before the state can move to a lower tax schedule; therefore the state now has preliminary plans to move to Schedule H. This means tax rates will shift from the current Schedule I range of 1.69% to 9.79%, to Schedule H range of 0.99% to 9.59%. The savings to employers is estimated to be approximately $30 million in 2017.

Employers are expected to be receiving a mailing from the state in December of 2016 about the new tax rate, which will apply to the First-quarter tax bills of 2017, due on May 1, 2017.

For more information, please contact a Sansiveri Tax Professional at 401-331-0500.