Rhode Island Accelerates Employer Filing Date

The Bloomberg BNA Tax Management Weekly State Tax Report filters through current state developments and analyzes those critical to multistate tax planning.

By Martha Kessler

Nov. 8 — The Rhode Island Division of Taxation has adopted the federal filing deadline for purposes of employer reporting of personal income tax withholding, joining at least 20 other states.

As a result, employers in the Ocean State will be required to file Form RI-W3 one month earlier than before, on Jan. 31 instead of Feb. 28, the division said in Rhode Island Advisory 2016-21, issued Nov. 3.The division said employers must also file the related Form W-2 information by Jan. 31 instead of Feb. 28.Bringing the Rhode Island filing date into line with a number of other states, including neighboring Connecticut and Massachusetts, is expected to serve as a convenience for many employers and also aid government agencies in fighting identity theft and fraud, the tax division said.

Federal Shift

Under federal law, employers were required to issue W-2 forms to their employees by Jan. 31 for the preceding calendar year. They were then required to file with the federal government and the Rhode Island Division of Taxation information on tax withheld from employees by a later date. The federal Protecting Americans from Tax Hikes (PATH) Act, signed into law in December 2015, shifted federal employer W-2 form submission deadlines to Jan. 31. The change in the federal statute applies to returns and statements related to calendar years 2016 and beyond.Rhode Island has now adopted the accelerated filing date as well. The change in the Rhode Island deadline applies for 2016 and later tax years, according to the state tax division.

Number of States Rises

Twenty states plus the District of Columbia and Puerto Rico had adopted the Jan. 31 filing deadline as of July 2016, according to ADP LLC, a Roseland, N.J.-based global human resources and payroll outsourcing service provider.This figure is up significantly from tax year 2014 when just five states, plus DC and Puerto Rico had an employer Form W-2 filing deadline of Jan. 31, ADP said.ADP noted in a legislative update that in order to meet the earlier Form W-2 filing deadlines established by federal and state tax authorities, employers may need to adjust their internal procedures and schedules for year-end tax reporting. For example, the firm suggested, “most states require a reconciliation of the year’s income tax withholding deposits to accompany Form W-2 submissions. Such reconciliations occasionally identify the need for adjustment or amended returns,” ADP said noting that prior to the shift in deadlines, many of these activities took place in February.

To contact the reporter on this story: Martha Kessler in Boston at MKessler@bna.com

To contact the editor responsible for this story: Ryan C. Tuck at rtuck@bna.com

For More Information

Text of Rhode Island Advisory 2016-21 is at http://src.bna.com/jXh.

Copyright © 2016 Tax Management Inc. All Rights Reserved.