Rhode Island Tax Form RI-1040NR - Nonresident Individual Income Tax Return Instructions

GENERAL INSTRUCTIONS

Read the instructions carefully. For your convenience we have provided step-by-step instructions which will aid you in completing your return. Complete your federal income tax return first. It is the basis for preparing your Rhode Island tax return. The Rhode Island tax is based on your federal taxable income. Fill out the RI-1040NR completely. Attach your withholding statement(s). This is the statement of taxes withheld, which is furnished to you by your employer. If the statement is not available, please explain. Be sure to sign your return.

These instructions are for the use of non-resident and part-year resident taxpayers only. Full Year resident taxpayers will file their individual income tax returns on Form RI-1040 or RI-1040S. Resident forms and instructions are available upon request at the Rhode Island Division of Taxation and on our website at www.tax.ri.gov.

DEFINITION OF RESIDENT AND NONRESIDENT

RESIDENT:a person (a) who is domiciled in the State of Rhode Island or (b) who, even though domiciled outside Rhode Island, maintains a permanent place of abode within the state and spends a total of more than 183 days of the taxable year within the state.

NONRESIDENT: any person not coming within the definition of a resident. For purposes of the above definition, domicile is found to be a place an individual regards as his or her permanent home – the place to which he or she intends to return after a period of absence. A domicile, once established, continues until a new fixed and permanent home is acquired. No change of domicile results from moving to a new location if the intention is to remain only for a limited time even if it is for a relatively long duration. For a married couple, normally both individuals have the same domicile. Any person asserting a change in domicile must show:

an intent to abandon the former domicile,
an intent to acquire a new domicile and
actual physical presence in a new domicile.

INCOME OF A NONRESIDENT SUBJECT TO TAX

A nonresident is subject to tax on all items included in his or her total federal income (including his or her distributive share of partnership income or gain and his or her share of estate or trust income or gain) which are derived from or connected with Rhode Island sources as follows:

From real or tangible personal property located in the state.
From a business, trade, profession or occupation carried on in the state.
From services performed in the state.
Winnings and prizes from RI lottery and pari-mutual betting events in this state.
A nonresident is not subject to tax on the following classes of income even though included in total federal income:
Annuities, interest, dividends or gains from the sale or exchange of intangible personal property unless they are part of the income from any business, trade, profession or occupation carried on in this state by the nonresident taxpayer.
Compensation received for active service in the military forces of the United States.

INCOME TERMS DEFINED

In these instructions “total federal income” is federal adjusted gross income as defined in the United States Internal Revenue Code (IRC) and applicable regulations. “Total income from Rhode Island sources” is that portion of your total federal income derived from or connected with Rhode Island sources. “Total Rhode Island income” is your total income from Rhode Island sources after making the additions and subtractions described later in these instructions. Total Rhode Island income of a part- year resident includes total income from Rhode Island sources for the entire year plus other income received during period of residence in Rhode Island after making the additions and subtractions described later in these instructions.

WHO MUST FILE A RETURN

Every nonresident individual required by the laws of the United States to file a federal income tax return who has income derived from or connected with Rhode Island sources must file a Rhode Island individual income tax return. Nonresidents should complete page 7, schedule III.

Every part-year individual who was a resident for a period of less than 12 months is required to file a Rhode Island return if he or she is required to file a federal return. Part-year residents should complete page 9, schedule V.

Nonresident and part-year resident individuals who are not required to file a federal income tax return may be required to file a Rhode Island individual income tax return if he or she has Rhode Island modifications increasing their Federal Adjusted Gross income.

JOINT AND SEPARATE RETURNS

JOINT RETURNS: Generally, if a husband and wife file a joint federal income tax return they also must file a joint Rhode Island income tax return.

However, if either the husband or wife is a resident and the other is a non-resident, they must file separate returns, unless they elect to file a joint return as if both were residents of Rhode Island. If the resident spouse files separately in Rhode Island and a joint federal return is filed for both spouses, the resident spouse must compute income, exemptions and tax as if a separate federal return had been filed.

If neither spouse is required to file a federal income tax return and either or both are required to file a Rhode Island income tax return, they may elect to file a joint Rhode Island income tax return.

Individuals filing joint Rhode Island income tax returns are both equally liable to pay the tax. They incur what is known as “joint and several liability” for Rhode Island income tax.

SEPARATE RETURNS: Individuals filing separate federal income tax returns must file separate Rhode Island income tax returns.

MILITARY PERSONNEL

Under the provisions of the Soldiers and Sailors Civil Relief Act the service pay of members of the armed forces can only be subject to income tax by the state of which they are legal residents. Place of legal residence at the time of entry into the service is normally presumed to be the legal state of residence and remains so until legal residence in another state is established and service records are changed accordingly. The Rhode Island income tax is imposed on all the federal taxable income of a resident who is a member of the armed forces, regardless of where such income is received. Military pay received by a nonresident service person stationed in Rhode Island is not subject to Rhode Island income tax. This does not apply to other income derived from Rhode Island sources, e.g., if the service person holds a separate job, not connected with his or her military service, income received from that job is subject to Rhode Island income tax. Income derived from Rhode Island sources by the service person’s spouse is subject to Rhode Island income tax.

Internal Revenue Code provisions governing armed forces pay while serving in a “combat zone” or in an area under conditions that qualify for Hostile Fire Pay are applicable for Rhode Island purposes.

DECEASED TAXPAYERS

If the taxpayer died before filing a return for 2008, the taxpayer’s spouse or personal representative must file and sign a return for the person who died if the deceased was required to file a return. A personal representative can be an executor, administrator or anyone who is in charge of the taxpayer’s property. The person who files the return should write “deceased” after the deceased’s name and show the date of death in the name and address space on the return.

If you are claiming a refund as a surviving spouse filing a joint return with the deceased, no other form is needed to have the refund issued to you. However, all other filers requesting a refund due the deceased, must file Form RI-1310, Statement of Person Claiming Refund Due a Deceased Taxpayer, to claim the refund.

WHEN TO FILE

Your return must be filed no later than April 15, 2009.

If the due date of your return falls on a Saturday, Sunday or Rhode Island legal holiday, the return will be due on the next working day.

EXTENSION OF TIME

Any extension of time for filing an individual income tax return granted shall not operate to extend the time for the payment of any tax due on such return. In General -

An individual who is required to file a Rhode Island income tax return shall be allowed an automatic six month extension of time to file such return.
An application must be prepared in duplicate on form RI-4868. Page I-1
The original of the application must be filed on or before the date prescribed for the filing of the return of the individual with the Rhode Island Division of Taxation.
The application for extension must show the full amount properly estimated as tax for the taxable year, and the application must be accompanied by the full remittance of the amount properly estimated as tax which is unpaid as of the date prescribed for the filing of the return.

NOTE: If no payment is required to be made with your Rhode Island extension form and you are filing a federal extension form for the same period of time, then you do not need to submit the Rhode Island form. Attach a copy of the Federal Form 4868 or the electronic acknowledgement you receive from the IRS to your Rhode Island individual income tax return at the time it is submitted.

WHERE TO FILE

Mail your return to:

STATE OF RHODE ISLAND
Division of Taxation
One Capitol Hill
Providence RI 02908-5814

WHERE TO GET FORMS

As far as practical, tax forms and instructions are mailed directly to taxpayers. Additional forms may be obtained from:

The Division of Taxation (401) 574-8970
The website http://www.tax.ri.gov

MISSING OR INCORRECT FORM W-2

This is the form furnished to you by your employer which shows the amount of your income tax withheld by them, and a copy of it must accompany your Rhode Island income tax return if you are to receive credit for such withheld tax. Only your employer can issue or correct this form. If you have not received a Form W-2 from your employer by February 15, 2009 or if the form which you have received is incorrect, contact your employer as soon as possible.

ROUNDING OFF TO WHOLE DOLLARS

The money items on your return and schedules may be shown in whole dollars. This means that you may eliminate any amount less than 50 cents and increase any amount from 50 cents to 99 cents to the next higher dollar.

CHANGES IN YOUR FEDERAL TAXABLE INCOME OR FEDERAL TAX LIABILITY

You must report to the Rhode Island Division of Taxation any change or correction in federal taxable income or federal tax liability as reported on your federal income tax return, whether resulting from the filing of an amended federal return or otherwise, within 90 days after filing such amended return or final determination of such change by the Internal Revenue Service. Use form RI-1040X to report any changes.

RHODE ISLAND LOTTERY PRIZES

Winnings and prizes received from the Rhode Island Lottery are taxable under the Rhode Island personal income tax and are includable in the income of both residents and non-residents alike.

SIGNATURE

You must sign your Rhode Island income tax return and both husband and wife must sign their

joint return. An unsigned return cannot be processed.

Any paid preparer who prepares a taxpayer’s return must also sign as “preparer”. If a firm or corporation prepares the return, it should be signed in the name of the preparer on behalf of the firm or corporation.

If you wish to allow the Tax Division to contact your paid preparer should questions arise about your return, check the appropriate box above the preparer’s name.

Don’t need forms mailed to you next year? Taxpayers who pay someone else to prepare their returns probably do not need a booklet mailed to them each year. If you do not need a booklet mailed to you next year, check the box below the signature line.

PAYMENTS OR REFUNDS

Any PAYMENT of tax liability shown on your return to be due the State of Rhode Island must be paid in full with your return. Make check or money order payable to the Rhode Island Division of Taxation and forward with your return to the State of Rhode Island, Division of Taxation, One Capitol Hill, Providence, RI 02908-5814. An amount due of less than one dollar ($1) need not be remitted.

A REFUND will be made if overpayment of income tax is shown on your return, unless you indicate on your return that such overpayment is to be credited to estimated tax liability for 2009. No other application for refund is necessary. Please note that no refund can be made unless your return is properly signed. Refunds of less than $1.00 will not be made unless specifically requested.

ESTIMATED INCOME TAX

If a taxpayer can reasonably expect to owe more than $250 after allowing for withholding tax and/or credits, he or she must make estimated tax payments. Estimated tax payments are made on Form RI-1040ES that has instructions for computing the estimated tax and making payments.

NET OPERATING LOSS DEDUCTIONS

The Rhode Island Personal Income Tax law relating to Net Operating Loss deduction (NOL) has been amended by enactment of RIGL §44-30-2.8 and RIGL §44-30-87.1

Under the provisions of RIGL §44-30-2.8, the five (5) year carry back provision for years ending in 2001 and 2002 provided by the Job Creation and Worker Assistance Act of 2002 (P.L.107-147) for federal tax purposes shall not be allowed for Rhode Island tax purposes. If a taxpayer has already filed a return claiming a five (5) year carry back, he/she must file a Rhode Island amended return on form RI-1040X.

Under the provisions of RIGL §44-30-87.1, for losses incurred for taxable years beginning on or after January 1, 2002, an NOL deduction may not be carried back for Rhode Island personal income tax purposes, but will only be allowed as a carry forward for the number of succeeding years as provided in IRS Section 172. A carry forward can only be used on the Rhode Island return to the extent that the carry forward is used on the federal return.

Should you have any questions regarding this notice, please call the Personal Income Tax Section at (401) 574-8829.

BONUS DEPRECIATION

A bill passed disallowing the new federal bonus depreciation for Rhode Island tax purposes. When filing a Rhode Island tax return any bonus depreciation taken for federal purposes must be added back to income as a modification on Schedule I, line 23(d) for Rhode Island purposes. In subsequent years, when federal depreciation is less than what previously would have been allowed, the difference may be deducted from income as a modification on Schedule I, line 24(i) for Rhode Island purposes.

A separate schedule of deprecation must be kept for Rhode Island purposes. The gain or loss on the sale or other disposition of the asset is to be determined, for Rhode Island purposes, using the Rhode Island depreciation schedule.

EXAMPLE: A company bought equipment after September 11, 2001 that cost $10,000 and had a 10 year life and qualified for 30% bonus depreciation. Depreciation for federal purposes in the first year was $3,700 (30% X $10,000) + (10% x 7,000). Normal depreciation in the first year would have been $1,000. The Company should add back on RI-1040NR, Schedule I, line 23(d) - Bonus Depreciation, the amount of $2,700 ($3,700 $1,000). In subsequent years the company should deduct $300 ($1000 - $700) each year while depreciation lasts. The deduction should be on RI1040NR, Schedule I, line 24(i) - Bonus Depreciation.

If a taxpayer has already filed a return, a form RI1040X should be filed.

Questions on this procedure should be addressed by calling the Personal Income Tax Section at (401) 574-8829, Option #3.

SECTION 179 DEPRECIATION

Rhode Island passed a bill disallowing the increase in the Section 179 depreciation under the Jobs & Growth Tax Relief Reconciliation Act of 2003. Section 179 depreciation will remain limited to $25,000 for Rhode Island income tax purposes. When filing your Rhode Island tax return any additional Section 179 depreciation taken must be added back to federal adjusted gross income as a modification on RI-1040NR, schedule I, line 23(e) Section 179 Depreciation. In subsequent years, when federal depreciation is less than what previously would have been allowed, the difference may be deducted from federal adjusted income as a modification on RI-1040NR, schedule I, line 24(j) Section 179 Depreciation.

A separate schedule of depreciation must be kept for Rhode Island purposes. The gain or loss on the sale or other disposition of the asset is to be determined, for Rhode Island purposes, using the Rhode Island depreciation schedule.

FAMILY EDUCATION ACCOUNTS

(Tuition Savings Program – Section 529)

A modification decreasing federal adjusted gross income may be claimed for contributions made to a Rhode Island “qualified tuition program" under section 529 of the Internal Revenue Code, 26 U.S.C. §

529. The maximum modification shall not exceed $500, $1,000 if a joint return, regardless of the number of accounts. Taxpayers should claim the modification on RI-1040NR, schedule I, line 24(g) Tuition Savings Program (section 529 accounts). If the funds are rolled over to a Tuition Savings Plan of another state or are an unqualified withdrawal, recapture is required. Taxpayers may also take a modification decreasing federal adjusted gross income in the amount of any qualified withdrawal or distribution from the “Tuition Saving Program” which is included in federal adjusted gross income. Taxpayers should claim the modification on RI-1040NR, schedule I, line 24(g) -Tuition Savings Program (section 529 accounts).

RHODE ISLAND TAX CREDITS

Rhode Island law provides special Rhode Island tax credits which may be applied against the Rhode Island income tax. Before claiming any credits, taxpayers should refer to the Rhode Island law and/or regulations for specific requirements for each credit such as carryover provisions and the order in which the credits must be used. Taxpayers claiming credits must attach the proper form(s) and other documentation to the return; failure to do so will result in disallowance of the credit.

INTEREST

Any tax not paid when due, including failure to pay adequate estimated tax, is subject to interest at the rates of 18% (.18).

Interest on refunds of tax overpayments will be paid if the refund is not paid within 90 days of the due date or the date the completed return was filed, whichever is later. The interest rate for tax overpayments is 5.00% (.0500).

PENALTIES

The law provides for penalties in the following circumstances:

Failure to file an income tax return
Failure to pay any tax due on or before the due date.
Preparing or filing a fraudulent income tax return.

USE OF FEDERAL INCOME TAX INFORMATION

All amounts reported from the Federal Form 1040, 1040A, 1040EZ, 1040NR and 1040NR-EZ, as well as those reported on Form RI-1040NR are subject to verification and audit by the Rhode Island Division of Taxation.

The Rhode Island Division of Taxation and the Internal Revenue Service exchange income tax information to verify the accuracy of the information reported on Federal and Rhode Island income tax returns.

PAYMENT BY CREDIT CARD

To Pay by Credit Card. You may use your American Express® Card, Discover® Card, Visa® Card or MasterCard® card. To pay by credit card, call toll free or access by Internet the service provider listed on this page and follow the instructions of the provider. A convenience fee will be charged by the service provider based on the amount you are paying. You will be told what the fee is during the transaction and you will have the option to either continue or cancel the transaction. You can also find out what the fee will be by calling the provider’s toll-free automated customer service number or visiting the provider’s Web Site shown below. If you paid by credit card, enter on page 1 of Form RI-1040NR in the upper left corner the confirmation number you were given at the end of the transaction and the amount of your tax payment (not including the convenience fee).

You may also use this method for making 2009 Rhode Island estimated income tax payments.

OFFICIAL PAYMENTS CORPORATION

Telephone payments: 1-800-2PAY-TAX (1-800-272-9829)

On line payments: www.officialpayments.com

Customer Service: 1-877-754-4413

OTHER QUESTIONS

Obviously the foregoing general instructions and the specific instructions for completing the return form(s) which follow will not answer all questions that may arise. If you have any doubt regarding completion of your return, further assistance may be obtained at the Division of Taxation, One Capitol Hill, Providence RI 02908-5801 or by calling taxpayer assistance at (401) 574-8829, Option #3.

LINE BY LINE INSTRUCTIONS

NAME AND ADDRESS

If the name or address shown on the return is incorrect, print or type any necessary correction on the return. If you did not receive the booklet and pre-addressed return, please complete the identification portion of the return, including the city or town of legal residence.

ELECTORAL SYSTEM CONTRIBUTION

You may designate a contribution of five dollars ($5) or ten dollars ($10) if married and filing a joint return, to the account for the public financing of the electoral system. The first two dollars ($2) or four dollars ($4) if married and filing a joint return, up to a total of two hundred thousand dollars ($200,000) collectively for all parties and the nonpartisan account, shall be allocated only to political parties which at the preceding general election, nominated a candidate for governor and such candidate polled at least 5 percent of the entire vote cast in the state for governor. The remaining funds shall be allocated for the public financing of campaigns for governor.

An electoral system contribution will NOT increase your tax due or reduce your refund.

DESIGNATION OF POLITICAL PARTY

If you don’t name a political party, your contribution will by credited to the nonpartisan general account or you can check the box and designate a political party. If you designate:

a political party which did not receive at least 5 percent of the entire vote for Governor in the preceding general election,
a non-existent political party,
a particular office,
an individual officeholder or political figure or
a national party which is not a state party, your electoral system contribution will be credited to the nonpartisan general account.

If you designate more than one political party, your contribution will be credited to the first political party named.

FILING STATUS

Check the appropriate box to indicate your filing status. Generally your filing status for Rhode Island income tax purposes is the same as for Federal income tax purposes.

Line 1 – Federal Adjusted Gross Income:

Enter your federal adjusted gross income from Federal Form 1040, line 37; 1040A, line 21; 1040EZ, line 4; 1040NR, line 35 or 1040NR-EZ, line 10.

Line 2 – Modifications:

Enter your net modifications from schedule I, line 25. Schedule I is found on page 5 of Form RI-1040NR and is discussed further in these instructions.

Line 3 – Modified Federal Adjusted Gross Income:

Determine your modified federal adjusted gross income by combining the amount on line 1 with the amount on line 2.

Line 4 – Deductions:

Enter your RI standard deduction or amount from Federal Schedule A, line 29, whichever is greater.

Single $5,450
Married Joint $9,100
Qualifying Widower $9,100
Married Separate $4,550
Head of Household $8,000

If you or your spouse were age 65 or older (born BEFORE 01/02/1944) or blind at the end of 2008 see the RI Standard Deduction Schedule A on page 4 to determine the amount of your standard deduction. If you use the Schedule to determine the amount of your standard deduction, you must attach the schedule to your RI-1040NR.

If someone else can claim you on their return you must complete the RI Standard Deduction Schedule B on page 4 to determine the amount of your standard deduction. If you use the Schedule to determine the amount of your standard deduction, you must attach the schedule to your RI-1040NR.

If you are filing a federal form 1040NR or 1040NR-EZ enter the amount from 1040NR, Schedule A, line 17 or 1040NR-EZ, line 11, whichever applies.

NOTE: If you itemize your deductions and line 3 is more than $159,950 ($79,975 if married filing separate), you need to recalculate your itemized deductions based on your modified federal adjusted gross income. Complete the RI Itemized Deduction Schedule on page 4. If you use the Schedule to determine the amount of your standard deduction, you must attach the schedule to your RI1040NR

NOTE: If you are filing married filing joint or married filing separate, you may itemize your deductions on your RI return even if you do not itemize on your federal return. Calculate your itemized deductions on your Federal Schedule A. Compare the amount to your RI standard deduction and enter the larger amount.

Line 5

Subtract line 4 from line 3.

Line 6 – Number of Exemptions:

Enter the amount from Federal Form 1040, line 6d; 1040A, line 6d or 1040NR, line 7d. If you are filing a Federal Form 1040NR-EZ, enter 1. If you are filing a Federal 1040EZ, enter the amount from the chart on below in the box on line 6.

Amount on Federal 1040EZ, line 5	Enter in box on RI-1040, line 6
Less than 5,450	0
5,450	0
8,950	1
10,900	0
14,400	1
17,900	2

Multiply the number of exemptions in the box by $3,500.

However, if line 3 is more than $119,975 see worksheet on the top of page I-4 to compute your exemption amount.

Line 7 – Rhode Island Taxable Income:

Subtract line 6 from line 5.

Line 8A – Rhode Island Income Tax:

Enter the RI income tax from the RI Tax Table or Tax Computation Worksheet, RI Schedule CGW, RI Schedule D, RI Schedule J or RI-8615. Check the box to indicate the method used to calculate the RI Income tax. Check only one box.

Line 8B – Other RI Taxes:

Enter the amount from RI Schedule OT, page 3, line 14. Use this line to report any tax from lump-sum distributions, parents’ election to report child’s interest and dividends, recapture of federal tax credits and miscellaneous federal taxes.

Line 9 – Rhode Island Alternative Minimum Tax:

If you are reporting an alternative minimum tax on your federal income tax return, you must complete form RI-6251 and enter the amount from RI-6251, line 6 on Form RI-1040NR, page 1, line 9. Attach a copy of Form RI-6251 to your RI-1040NR.

NOTE: If you have claimed modifications to federal adjusted gross income on line 2, you must recalculate your federal alternative minimum tax based on your modified federal adjusted gross income. If you did not report a federal alternative minimum tax, but a federal alternative minimum tax would be required based on your modified federal adjusted gross income, you must calculate a federal alternative minimum tax based on your modified federal adjusted gross income for Rhode Island purposes and complete RI-6251.

Line 10 – Total Rhode Island Income Tax:

Add lines 8A, 8B and 9.

Line 11 – Rhode Island Percentage of Allowable Federal Credits:

Enter the amount of allowable federal credits from page 2, schedule II, line 34.

Line 12 – Rhode Island Tax After Allowable Federal Credits – Before Allocation:

Subtract line 11 from line 10. If zero or less, enter zero.

Line 13 – Rhode Island Allocated Income Tax:

If ALL your income is from Rhode Island, check the first box and enter the amount from line 12 on this line.

If you are a NON-RESIDENT with income from outside Rhode Island, complete page 7, schedule III and enter the result on this line. Also, check the second box.

If you are a PART-YEAR RESIDENT with income from outside Rhode Island, complete page 9, schedule V and enter the result on this line. Also check the third box.

Line 14 – Other Rhode Island Credits:

Complete RI Schedule CR on page 6. List each credit and the amount of the credit being used. Attach a copy of the appropriate credit form and all necessary documentation to your RI-1040NR.

Line 15A – Total Rhode Island Income Tax – After Rhode Island Credits:

Subtract line 14 from line 13. If zero or less, enter zero.

Line 15B – Alternative Flat Tax:

Enter the amount of Rhode Island Alternative Flat Tax from page 3, RI Schedule FT, line 29.

Line 15C – Rhode Island Tax: Enter the SMALLER of your RI tax on line 15A or your RI Alternative Flat Tax on line 15B. If your tax is calculated using the Alternative Flat Tax method on Schedule FT, make sure you check the box on line 15C.

Line 16 – Rhode Island Checkoff Contributions:

Enter amount of checkoff contributions from page 3, Schedule IV, line 8. An explanation of each checkoff contribution is contained on page I-7 of these instructions. These checkoff contributions will increase your tax due or reduce your refund.

Line 17 – Total Rhode Island Tax and Checkoff Contributions:

Add lines 15C, 16 and any Use/Sales Tax from line 6 on the worksheet located on the top of the next page. Also, enter the amount of Use/Sales tax in the space provided on line 17.

WHAT IS A USE TAX? A Use Tax is a tax on the use of tangible personal property in a state where the property has not been subject to the sales tax. Rhode Island Use Tax applies when merchandise purchased outside of Rhode Island is brought into Rhode Island. Sales and use taxes are complementary taxes and are assessed at the same rate. In Rhode Island, the sales and use tax rate is 7%. The Rhode Island Use Tax is most often due when merchandise subject to the sales tax in Rhode Island is purchased from an out-of-state vendor who did not collect the Rhode Island tax and the property is subsequently used in this state. Common examples of transactions from which use tax liability may arise are mail order catalog sales and toll-free “800” purchases and purchases made over the internet.

WHAT IS TAXABLE? The same items that are subject to the Rhode Island Sales Tax are subject to the use tax. Some typical examples of taxable items are jewelry, computers and electronic equipment. Clothing and footwear are not taxable.

HOW DO I FILE AND PAY? To report use tax, please complete the Rhode Island Individual Consumer’s Use/Sales Tax worksheet on the top of page I-5.

Line 18A – Rhode Island Income Tax Withheld:

Enter total amount of Rhode Island 2008 income tax withheld. (Attach state copy of all forms W-2, 1099s, etc. to the front of the return.) Credit for Rhode Island income tax withheld will be allowed only for those amounts supported by attached W-2s, 1099s, etc. NOTE: You can not claim Rhode Island Temporary Disability Insurance payments (RI TDI or SDI) as income tax withheld. These amounts are non refundable on RI-1040NR.

Line 18B – 2008 Estimated Payments and Amount Applied from 2007 return:

Enter the amount of estimated payments on 2008 Form RI1040ES and the amount applied from your 2007 return.

Line 18C – Nonresident Withholding on Real Estate Sales in 2008:

Enter the amount of Rhode Island income tax withheld on sales of real estate located in Rhode Island.

Line 18D - Nonresident withholding from pass- through entities:

Enter pass-through withholding paid on your behalf from form RI 1099-PT, box 8 (attach Form RI 1099-PT to your return).

Line 18E – RI Earned Income Credit:

Enter amount from RI Schedule EIC, page 2, line 43. If you are claiming a RI earned income credit you must attach RI Schedule EIC to your RI-1040NR.

Line 18F – Other Payments:

Enter any other payments, including advance payments made with your application for an automatic extension of time to file (Form RI-4868). Attach a copy of Form RI4868 and check the box on the face of the RI1040NR to the right of line 18.

Line 18G – Total Payments and Credits:

Add lines 18A, 18B, 18C, 18D, 18E and 18F.

Line 19 – Balance Due:

If the amount on line 17 is greater than the amount of line 18G, SUBTRACT line 18G from line 17 and enter the balance due on line 19. This is the amount you owe. This amount is payable in full with your return. Complete Form RI-1040V. Send payment and Form RI-1040V with your return. An amount due of less than one dollar ($1) need not be paid.

If you owe underestimating interest, complete Form RI-2210 or Form RI-2210A. Indicate the amount of interest due from RI-2210, line 12 or line 22 or form RI-2210A, line 12 in the space provided on line 19. Add the interest to the amount due, enter the total on line 19 and include the total amount due with your return.

Line 20 – Overpayment:

If the amount on line 18G is greater than the amount on line 17, SUBTRACT line 17 from line 18G and enter the overpayment on line 20.

Line 21 – Overpayment to be Refunded:

Enter the amount of the overpayment on line 20 that is to be refunded. Refunds of less than $1.00 will not be paid unless specifically requested.

Line 22 - Overpayment to be Applied to 2008:

Enter the amount of overpayment on line 20 which is to be applied to your 2008 estimated tax. (See General Instructions)

RI SCHEDULE I MODIFICATIONS TO FEDERAL ADJUSTED GROSS INCOME

Modifications INCREASING Federal AGI:

Line 23(a)

Enter income from obligations of any state or its political subdivision, other than Rhode Island under RIGL §44-30-12(1) and §44-30-12(2).

Line 23(b)

Rhode Island fiduciary adjustment as beneficiary of an estate or trust under §44-30-17.

Line 23(c)

Recapture of Family Education Account Modifications under RIGL §44-30-25(g).

Line 23(d)

Bonus depreciation that has been taken for federal purposes that must be added back to Rhode Island income under RIGL §44-61-1 (See general instructions for more details).

Line 23(e)

Increased Section 179 depreciation that has been taken for federal purposes that must be added back to Rhode Island income under RIGL §44-61-1.1 (See general instructions for more details).

Line 23(f)

Recapture of Tuition Savings Program modifications (section 529 accounts) under RIGL §44-30-12(4) (See general instructions for more details).

Line 23(g)

Recapture of Historic Tax Credit or Motion Picture Production Company Tax Credit modifications decreasing Federal AGI previously claimed under RIGL §44-33.2-3(2) and RIGL §4431.2-9, respectively.

Line 23(h)

Recapture of Scituate Medical Savings Account modifications under RIGL §44-3025.1(d)(3)(i).

Line 23(i)

Total Modifications Increasing Federal Adjusted Gross Income: Add lines 23(a) through 23(h).

Modifications Decreasing Federal AGI:

Line 24(a)

Enter income from obligations of the United States Government to the extent included in adjusted gross income for federal tax purposes but exempt for state purposes. Example – US Government Series E bond interest. Taxpayers claiming these modifications must submit a schedule showing the source and amount of income claimed to be exempt.

Line 24(b)

Rhode Island fiduciary adjustment as beneficiary of an estate or trust under RIGL §44-30

Line 24(c)

Elective deduction for new research and development facilities under RIGL §44-32-1 (Attach form RI-1040RD).

Line 24(d)

Railroad Retirement benefits included in gross income for federal income tax purposes but exempt from state income taxes under the laws of the United States.

Line 24(e)

Qualifying investment in a certified venture capital partnership under RIGL §44-43-2.

Line 24(f)

Family Education Accounts under RIGL §44-30-25 – Enter amount of modification decreasing federal AGI from RI-1040FEA.

Line 24(g)

Tuition Saving Program (section 529 accounts) RIGL §44-30-12 -A modification decreasing federal adjusted gross income may be claimed for any contributions made to a Rhode Island account under the tuition savings program. The maximum modification shall not exceed $500, $1,000 if a joint return. (See general instructions for more details).

Line 24(h)

Exemptions from tax on profit or gain for writers, composers and artists residing within a section of the defined Economic Development Zone as defined in RIGL §44-30-1.1 within the cities of Newport, Providence, Pawtucket, Woonsocket or Warwick, or the Towns of Little Compton, Tiverton, Warren or Westerly and creating artistic works while a resident of the Zone. Taxpayers claiming these modifications must submit a schedule showing the source and amount of income claimed to be exempt.

Line 24(i)

Depreciation that has not been taken for federal purposes because of the bonus depreciation that must be subtracted from Rhode Island income - RIGL §44-61-1. (See general instructions for more details)

Line 24(j)

Depreciation that has not been taken for federal purposes because of the increased section 179 depreciation was not taken originally RIGL §44-61-1.1. (See general instructions for more details).

Line 24(k)

Allowable modification for performance based compensation realized by an eligible employee under the Rhode Island Jobs Growth Act under RIGL §42-64.11-4.

Line 24(l)

Modification for exclusion for qualifying option under RIGL §44-39.3 AND modification for exclusion for qualifying securities or investments under RIGL §44-43-8.

Line 24(m)

Modification for Tax Incentives for Employers under RIGL §44-55-4.1.

Line 24(n)

Interest on indebtedness incurred or continued to purchase or carry obligations or securities the income of which is exempt from Rhode Island personal income tax, to the extent that such interest has been deducted in determining federal adjusted gross income under RIGL §44-30-12(c)(1)

Line 24(o)

Historic Tax Credit income or Motion Picture Production Company Tax Credit income reported on Federal return that is tax exempt under RIGL §44-33.2-3(2) and RIGL §44-31.2-9(c), respectively.

Line 24(p)

Active duty military pay of Nonresidents stationed in Rhode Island.

Line 24(q)

Recapture of Scituate Medical Savings Account modifications under RIGL §44-3025.1(d)(3)(i).

Line 24(r)

Total Modifications Decreasing Federal Adjusted Gross Income: Add lines 24(a) through 24(q). Enter as a negative number.

Line 25

Net Modifications: Combine lines 23(i) and 24(r). Enter here and on RI-1040NR, page 1, line 2.

RI SCHEDULE II ALLOWABLE FEDERAL CREDITS

RIGL §44-30-2.6(d)(e)(f)

Not all federal credits are available to take on your Rhode Island return. In general only the federal credits that were enacted prior to January 1, 1996 are eligible. These credits listed in this section are eligible. Credits such as the Child Tax Credit, Retirement Savings Contribution Credit and Education credits are not allowed.

Line 26

Rhode Island Income Tax: Enter the amount from Form RI-1040NR, page 1, line 10.

Line 27

Credit for Child and Dependent Care

Expenses:Expenses: Enter the amount from Federal Form 1040, line 48; 1040A, line 29 or 1040NR, line 44.

Line 28 – Credit for Elderly or the Disabled:

Enter the amount from Federal Form 1040, line 49 or 1040A, line 30.

Line 29 – Federal Mortgage Interest Credit:

Enter the amount from Federal Form 8396, line 13.

Line 30 – Federal Adoption Credit:

You can only claim the Adoption credit if the adopted child was under the care, custody or supervision of the Rhode Island Department of Children, Youth and Families prior to the adoption. Enter the amount that applies from Federal Form 8839, line 18.

Line 30 – Federal Adoption Credit: You can only claim the Adoption credit if the adopted child was under the care, custody or supervision of the Rhode Island Department of Children, Youth and Families prior to the adoption. Enter the amount that applies from Federal Form 8839, line 18.

Line 31 – Other federal credits:

Enter the amount of allowable federal credits from Federal Form 1040, lines 54 and 68 or 1040NR, lines 49 and 63.

Allowable Federal Credits included on Federal Form 1040, lines 55 and 70:

3468 Investment Credit
6478 Credit for Alcohol Used as Fuel
6765 Credit for Increasing Research Activities
8586 Low-Income Housing Credit
8826 Disabled Access Credit
8830 Enhanced Oil Recovery Credit
8835 Renewable Electricity Production Credit
8845 Indian Employment Credit
8846 Credit for Employer Social Security and Medicare Taxes Paid on Certain Employees
8847 Credit for Contributions to Selected Community Development Corporations
8801 Credit for Prior Year Minimum Tax
8834 Qualified Electric Vehicle Credit
8844 Empowerment Zone Employment Credit
4136 Credit for Federal Tax Paid on Fuels

Line 32 – Total Allowable Federal Credits:

Add lines 27, 28, 29, 30 and 31.

Line 33

Multiply the amount on line 32 by 25%

Line 34 Maximum Credit:

Enter the amount from line 26 or 33, whichever is less. Enter here and on form RI-1040NR, page 1, line 11.

RI SCHEDULE EIC EARNED INCOME CREDIT

Line 35 – Rhode Island Income Tax:

Enter the amount from RI-1040NR, line 15a.

Line 36 – Federal Earned Income Credit:

Enter the amount of Federal Earned Income Credit from Federal Form 1040, line 64a; 1040A, line 40a or 1040EZ, line 8a.

Line 37

The RI percentage rate for 2008 is 25%.

Line 38

Multiply line 36 by line 37.

Line 39

Enter the smaller of line 35 or line 38.

Line 40

Subtract line 39 from line 38. If line 39 is greater than or equal to line 38, skip line 41A through line 42 and enter the amount from line 39 on line 43. Otherwise, continue to line 41A.

Line 41A

The refundable RI percentage is 15%.

Line 41B

Multiply line 40 by line 41A.

Line 41C

Rhode Island Allocation: enter the amount of your RI allocation from Schedule III, page 7, line 13 or Schedule V, page 9, line 14.

Line 42 – Rhode Island Refundable Earned Income Credit:

Multiply line 41B by line 41C.

Line 43 – Total Rhode Island Earned Income Credit:

Add line 42 and line 39. Enter here and on RI-1040NR, line 18E.

Rhode Island Tax Help Links