Rhode Island State Tax Routine (RITX)

The Rhode Island State Tax Special Routine Processing utilizes the following steps:

Line 1	Multiply the employee’s gross wages for the current payroll period by the number of payroll periods in a year to obtain their Annualized Gross Income (GI).
Line 2	Determine the employee’s deductions: A. Personal Exemption*
Line 3	Determine the Taxable Amount by subtracting Line 2 from Line 1.
Line 4	Using the Marginal Tax Rates (DEDX) entries for the Rhode Island State Tax deduction, compute tax on the Taxable Amount (Line 3).
Line 5	Divide the amount on Line 4 by the number of payroll periods in a year to determine the employee’s Rhode Island Withholding Tax for the pay period.

*Determine the Personal Exemption Amount

Compare the employee’s taxable wages to the value in the Maximum Standard Deduction Amount field on the Tax Parameters (TAXP) entry for the employee’s Rhode Island State Tax deduction and Marital status.
If the employee’s taxable wage amount is equal to or less than the amount set in the Maximum Standard Deduction Amount field, multiply the amount in the Annual Exemption Amount field by the number of State Tax Allowances on the employee’s Employee Tax Parameter (TAX)**.
If the employee’s taxable wage amount is greater than the amount set in the Maximum Standard Deduction Amount field, multiply the amount in the Standard Deduction Rate field by the number of State Tax Allowances on the employee’s Employee Tax Parameter (TAX)**.

** Note, if you are utilizing Multi State Tax Processing, this value will come from the employee’s State Tax Enrollment (TAXS).

Note: The Rhode Island State Tax Routine is only available for sites that utilize the Next Generation Payroll service.

Data Setup Considerations

Sites will need to ensure they have implemented the following Business Process/Data Setup changes at their site prior to using the Rhode Island Tax Routine.

Tax Parameters (TAXP) Setup for Rhode Island Tax Deductions:

The Annual Exemption Amount field is the Withholding Exemption Amount for the specified Marital Status when the employee has not met the wage threshold for withholding tax exemption.
The Maximum Standard Deduction Amount is the amount used in the Personal Exemption calculation to define the wage threshold for withholding tax exemption amounts.
The Standard Deduction Rate is the Withholding Exemption Amount for the specified Marital Status when the employee has met the wage threshold for withholding tax exemption.

Employee Tax Parameter (TAX)/ State Tax Enrollment (TAXS) enrollment (Note: this only applies to employees enrolled in a Tax Class (TAXC) or State Tax Class (TAXCS) that includes an Rhode Island Tax Deduction).

The State Tax Allowance field is the State Personal Exemption count.

The functionality described above is only available when utilizing the Next Generation Payroll service.