Overview of Rhode Island Estate Tax Laws in 2015
Understanding How Rhode Island Estate Taxes Affect an Estate
NOTE: State laws change frequently and the following information may not reflect recent changes in the laws. For current tax or legal advice, please consult with an accountant or an attorney since the information contained in this article is not tax or legal advice and is not a substitute for tax or legal advice.
If you live in Rhode Island, then you live in one of the remaining U.S. states that still collect a state death tax.
In 2015, the estates of Rhode Island residents and certain nonresidents are subject to a state death tax under the following guidelines.
When is a Rhode Island Estate Tax Return Required to be Filed?
For a Rhode Island resident, in 2015 a Rhode Island Estate Tax Return, Form 100A, must be filed if the decedent's gross estate plus adjusted taxable gifts exceed $1,500,000.
For a nonresident, in 2015 the estate must file Form 100A if the estate includes real or tangible personal property located in Rhode Island and the gross estate plus adjusted taxable gifts exceeds $1,500,000.
A signed copy of the federal estate tax return, IRS Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return, must accompany Form 100A if the estate is required to file Form 706.
Note: The Rhode Island estate tax exemption increased from $675,000 to $850,000 on January 1, 2010, and then was indexed for inflation beginning in 2011.
Refer to Overview of Rhode Island Estate Tax Laws for 2014 and Prior Years for deaths that occurred prior to 2015.
When Are the Rhode Island Estate Tax Return and Estate Tax Payment Due?
Form 100A must be filed and any Rhode Island estate tax owed must be paid within nine months of the decedent's death.
An extension of time to file Form 100A may be requested, however, even if an extension is granted it won't delay the time for payment of any tax owed.
Where is the Rhode Island Estate Tax Return Filed?
Mail the Rhode Estate Tax Return (Form 100A), a $25.00 filing fee, any payment due, and all other required forms to:
Rhode Island Division of Taxation
Estate Tax Section
One Capitol Hill
Providence, RI 02908
Make checks payable to "RI Division of Taxation."
What is the Rhode Island Estate Tax Rate?
The tax rate is a progressive rate that maxes out at 16% for the amount above $10,040,000.
Are Transfers to a Surviving Spouse Taxable?
Outright transfers to a surviving spouse are not taxable.
For married couples who have used traditional AB Trust planning to reduce their federal estate tax bill, a Rhode Island estate tax may be due on the B Trust after the first spouse's death since in 2015 there is a gap of $3,920,000 between the Rhode Island estate tax exemption and the federal estate tax exemption. However, a married decedent's estate is authorized to make an election on Form 100A to treat property as marital deduction qualified terminable interest property ("QTIP") for Rhode Island purposes, so married Rhode Island couples can defer payment of both Rhode Island estate taxes and federal estate taxes until after the death of the surviving spouse by using an ABC Trust scheme instead of AB Trust planning.
Do Nontaxable Estates Have to File Any Forms?
For gross estates valued at the exemption amount or less, Form 100, Estate Tax Credit Transmittal, can be filed to obtain discharge of the automatic statutory lien that attaches to all Rhode Island real estate a person owns at death, to obtain a Notice of No Tax Due for probate administration purposes, and to allow the sale of Rhode Island securities, including Rhode Island incorporated stock, Rhode Island state and municipal bonds, and mutual funds organized as business trusts that do business in Rhode Island.
Form 100 should be signed by the executor, administrator, trustee, or heir at law of the deceased person. It should be mailed along with a death certificate and $25.00 filing fee to the address listed above for Form 100A.
Note: As mentioned above, the Rhode Island estate tax exemption was increased from $675,000 to $850,000 on January 1, 2010, and was then indexed for inflation beginning in 2011.
Refer to Overview of Rhode Island Estate Tax Laws for 2014 and Prior Years for information about deaths that occurred prior to 2015.
Does Rhode Island Impose a Lien on the Deceased Person's Property?
Form T-77, Discharge of Lien Form, must be filed along with Form 100A or Form 100 if the decedent had any interest in real estate located in Rhode Island. Form T-77 must be filed in triplicate and the description of the real estate must be stated as the tax assessor's description which can be found on the property tax bill issued by the applicable city or town.
Form T-79, Estate Tax Waiver Form, must be filed along with Form 100A or Form 100 if the decedent had any interest in a security of a Rhode Island incorporated business requiring an estate tax waiver. Form T-79 must be filed in duplicate.
Where Can I Find Additional Information About Rhode Island Estate Taxes?
For more information about Rhode Island estate taxes, refer to the Rhode Island Division of Taxation website.