Rhode Island Division of Taxation Forms & Instructions
RI-1041 Fiduciary Income Tax Return Instructions (2025)
preamble
NEW FOR TAX YEAR 2025
Federal P.L. 119-21, H.R.1
Due to Rhode Island's decoupling from several provisions of Federal P.L. 119-21, H.R.1, the Rhode Island Division of Taxation created two new schedules that are required to be completed and included in the state filing if certain deductions are taken on the Federal return.
RI Schedule HR1 - Entity Addback of Federal P.L. 119-21, H.R.1 Provisions
This schedule is to be used to add back certain amounts allowed to be deducted on the Federal return due to the passage of Federal P.L. 119-21, H.R.1 Provisions.
The items that must be added back prior to determining Rhode Island Taxable Income are: Business interest expense deduction included on Federal Form 1 1041, line 10 [I.R.S. Code 163(j)] Section 174A Amortization Adjustment for research and experi-2 mental expenditures [I.R.S. Code 174A] Depreciation of business assets [I.R.S. Code 179(b)] 3 Qualified sound recording production deduction [I.R.S.Code 4 181]
See page I-12 for additional information on this schedule and each addback.
RI Schedule 174A Section 174A Amortization Worksheet
This schedule is to be used to by those taxpayers who do not elect to amortize Section 174A research and developmental expenditures on the Federal level. If, on the Federal level, the taxpayer fully expenses domestic section 174A research and developmental expenditures, the taxpayer is required to add back the accelerated amount being deducted.
See page I-13 for additional information on this schedule.
Pass-through Entity Election
Pursuant to R.I. Gen. Laws § 44-11-2.3, for tax years beginning on or after January 1, 2025, the state tax credit for a pass-through entity making the election to pay state income tax at the entity level shall be calculated at ninety percent (90%) of the amount of tax paid by the pass-through entity, at the entity level. The state tax credit calculated at ninety percent (90%) is the maximum amount that can passed through to the owners, on a pro rata basis.
Each K-1 issued to a beneficiary must include the tax paid on behalf of the beneficiary, as well as the increasing modification amount for the beneficiary.
NOTE this election is for the beneficiary(ies) of the trust only. The trust itself cannot have a pass-through entity election made on its behalf by a pass-through entity in which the trust is a member.
WHO MUST FILE
The fiduciary of a RESIDENT estate or trust must file a return on Form RI-1041 if the estate or trust: (1) is required to file a federal income tax return for the taxable year, or (2) had any Rhode Island taxable income for the taxable year.
The fiduciary of a NONRESIDENT estate or trust must file a return on Form RI-1041 if the estate or trust had income or gain derived from Rhode Island sources.
DEFINITIONS
A RESIDENT ESTATE is the estate of a decedent who at his or her death was a resident individual of Rhode Island.
A RESIDENT TRUST means, to the extent that one or more beneficiaries are residents in Rhode Island: (A) A trust created by a will of a decedent who at his or her death was a resident individual of Rhode Island, or (B) A revocable trust which becomes irrevocable upon the occurrence of any event (including death) which terminates a person's power to revoke, but only after the event, and only if the person having the power to revoke was a Rhode Island resident individual at the time of such event, or (C) An irrevocable trust created by or consisting of property contributed by a person who is a resident individual in this state at the time the trust was created or the property contributed (a) while such person is alive and a resident individual in this state, and (b) after such person's death if such person died a resident individual of this state, or (D) An electing small business trust under regulation 1.641(c)-1 of the Internal Revenue Code, (E) In cases A, B and C such trust is only a resident trust to the extent that the beneficiaries are Rhode Island residents.
WHAT SCHEDULES TO COMPLETE
All estates and trusts must complete Schedule I. If the trust has a nonresident beneficiary, follow the instructions for a nonresident estate or trust.
Resident Estates and Trusts: (1)Complete Schedule I and enter 1.0000 on page 1, line 9. (2)If the estate or trust is claiming credit for income taxes paid to another state, complete Schedules I and III.
Nonresident Estates or Trusts: (1)If the taxable income of the estate or trust is derived solely from Rhode Island sources, complete Schedule I and enter 1.0000 on page 1, line 9. (2)If the estate or trust has taxable income both within and without Rhode Island, complete Schedules I and II.
PERIODS TO BE COVERED
The fiduciary taxable year for Form RI-1041 shall be the same as the federal taxable year.
GENERAL INSTRUCTIONS Page I-1
PAYMENTS OR REFUNDS
PAYMENTS: Any tax due must be paid in full with the return. Make check or money order payable to the Rhode Island Division of Taxation. An amount due of less than five dollars ($5) need not be paid. REFUNDS: If an overpayment of income tax is shown on the return, a refund will be issued unless indicated on the return that such overpayment is to be credited to the fiduciary's estimated tax liability for 2026. No other application for refund is necessary. Please note that no refund can be issued unless the return is properly signed. Refunds of less than $5.00 will not be paid unless specifically requested.
SIGNATURE
The Rhode Island Fiduciary Income Tax Return must be signed. 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 firm or corporation.
ACCOUNTING PERIODS AND METHODS
The accounting period for which Form RI-1041 is filed and the method of accounting used are the same as for federal income tax purposes. If the taxable year or the method of accounting is changed for federal income tax purposes, such change applies similarly to the Rhode Island fiduciary return.
REPORT OF CHANGE IN FEDERAL TAXABLE INCOME
If the amount of the federal taxable income is changed or corrected by the Federal Government, the fiduciary must report to the Rhode Island Division of Taxation such change or correction within ninety (90) days after the final determination of such change or correction. Any fiduciary filing an amended federal income tax return must also file within ninety (90) days thereafter an amended Rhode Island return.
WHEN AND WHERE TO FILE
The due date is April 15, 2026 for returns filed for the calendar year 2025 and the 15th day of the fourth month following the close of the taxable year for returns filed for a year ending other than December 31. Mail your return to: One Capitol Hill Providence, RI 02908-5807
EXTENSION OF TIME
Any extension of time granted for filing a Rhode Island Fiduciary Income Tax Return shall not operate to extend the time for the payment of any tax due on such return. In General - (1) A fiduciary that is required to file a Rhode Island Fiduciary Income Tax Return shall be allowed an automatic five and a half month extension of time to file such return. (2) An application must be prepared in duplicate on Form RI- 8736. (3) The original of the application must be filed on or before the date prescribed for the filing of the return of the fiduciary with the Rhode Island Division of Taxation. (4) Such application for extension must show the full amount properly estimated as tax for such fiduciary for such taxable year, and such 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 the Rhode Island extension form and the fiduciary is filing a federal extension form for the same period of time, the fiduciary does not need to submit the Rhode Island form. Attach a copy of the Federal Form 7004 to the Rhode Island Fiduciary Income Tax Return at the time it is submitted.
WHERE TO GET FORMS
Additional forms and instructions may be obtained from: The website: tax-forms The Division of Taxation: (401) 574-8970
INTEREST AND PENALTIES INTEREST
Any tax not paid when due, including failure to pay adequate estimated tax, is subject to interest at the rate of 12.00% (0.1200) per annum.
Interest on refunds of tax overpayments will be paid if the refund is not paid within ninety (90) days of the due date or the date the completed return was filed, whichever is later. The interest rate for tax overpayments is 7.25% (0.0725).
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.
OTHER QUESTIONS
If you have any questions regarding completion of your return, further assistance may be obtained by calling the Personal Income Tax Section at (401) 574-8829 and selecting option #3.
PAYMENT BY CREDIT CARD
For information regarding the payment of taxes by credit card, please visit the Credit Card Payments page of the Division of Taxation's website.
card-payments
If you paid by credit card, enter on page 1 of Form RI-1041 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 2026 Rhode Island estimated income tax payments.
GENERAL INSTRUCTIONS Page I-2
COMPLETE THE FEDERAL INCOME TAX RETURN FIRST
The Federal Fiduciary Income Tax Return is the basis for preparing your Rhode Island Fiduciary Income Tax Return. In general, the Rhode Island fiduciary income tax is based on the fiduciary's federal total income. Accuracy and attention to detail in completing the return in accordance with these instructions will facilitate the processing of your tax return.
Type of Return - Indicate by checking the appropriate box what type of return you are preparing. If you are preparing a bankruptcy estate, see the 2025 Rhode Island Fiduciary Tax Rate Schedules for instructions on how to file.
This schedule can be found on the Division of Taxation's website at:
Names, Address and Federal Employer Identification Number - Make sure the names, address and federal employer identification number on the return are correct. Incorrect entries could delay the processing of your return.
Year End - Indicate by checking the appropriate box whether the fiduciary is a calendar or fiscal year filer. If the fiduciary is a fiscal year filer, indicate the beginning and the year-end of the fiduciary in the space provided. Only fiduciaries with a fiscal year beginning in 2025 may use this form.
Line 1 - Federal Total Income of Fiduciary Enter the amount of income from Federal Form 1041, line 9.
Line 2 - Modifications Increasing Federal Total Income
Enter the amount of modifications increasing federal total income from RI Schedule M for RI-1041 - page 2, line 2l.
See the RI Schedule M for RI-1041 section on page I-6 of these instructions for more information.
Line 3 - Modifications Decreasing Federal Income
Enter as a negative number the amount of modifications decreasing federal income from RI Schedule M for RI-1041 - page 1, line 1w.
See the RI Schedule M for RI-1041 section on page I-6 of these instructions for more information.
Line 4 - Net Modifications Combine lines 2 and 3.
Line 5 - Modified Federal Total Income
Combine lines 1 and 4. Add net increases or subtract net decreases, whichever applies.
Line 6 - Federal Total Deductions
Enter the amount of federal deductions from Federal Form 1041, lines 16 and 22.
However, if the fiduciary claimed modifications to federal total income, the fiduciary may need to recalculate the federal total deductions based on the fiduciary's modified federal total income. Attach a copy of the calculation to the return.
The amounts included in Federal Form 1041, line 16 should only be included on Form RI-1041, line 6 if the costs are paid or incurred in connection with the administration of the estate or trust, and would not have been incurred had the property not been held in the estate or trust.
In addition, the domestic production activity deduction and the net operating loss deduction may be included on Form RI-1041, line 6 to the extent they are included in Federal Form 1041, line 16.
The net operating loss deduction may not be carried back for Rhode Island purposes, but will be allowed as a carry forward on Form RI- 1041 to the extent the carry forward was used on Federal Form 1041.
Line 7 - Rhode Island Taxable Income Subtract line 6 from line 5.
Line 8 - Rhode Island Income Tax
Enter the Rhode Island income tax from the RI Fiduciary Tax Computation Worksheet.
Line 9 - Allocation
Nonresident estates or trusts enter the amount from page 3, Schedule II, line 34. Resident estates or trusts enter 1.0000.
Line 10 - RI Income Tax After Allocation Multiply the amount on line 8 by the percentage on line 9.
Line 11 - Credit For Income Taxes Paid To Other States
Resident estates or trusts only. Enter the amount from page 3, Schedule III, line 41.
Line 12 - Other RI Credits
Enter the amount of RI credits from RI Schedule CR for RI-1041, line 9. Enter the amount of each credit in the space provided and attach each required credit certificate or carry forward schedule to Form RI- 1041.
See the RI Schedule CR for RI-1041 section on page I-8 of these instructions for more information.
Line 13 - Total RI Credits Add lines 11 and 12.
Line 14a - Rhode Island Income Tax after Rhode Island Credits Subtract line 13 from line 10. (If zero or less, enter zero.)
Line 14b - Recapture of Prior Year Other Rhode Island Credits Enter amount of Credit Recapture from RI Schedule CR for RI-1041, line 12.
Line 14c - Electing Small Business Trust Tax
Enter the amount of Electing Small Business Trust income attributable to Rhode Island multiplied by the highest marginal income tax rate of 5.99%. The taxable income of the S-portion is determined by taking into account the Rhode Island source income of items of income, loss, deduction or credit and applying the highest marginal income tax rate.
Line 14d - Pass-through Withholding
Enter the amount of Rhode Island Pass-through Withholding due from Schedule PTW - 1041, Part B, line 13.
Starting with tax years beginning on or after January 1, 2023, pass-
SPECIFIC LINE INSTRUCTIONS
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through entities will calculate pass-through withholding for its nonresident members using RI Schedule PTW - 1041 and including the schedule with Form RI-1041.
See the RI Schedule PTW - 1041 section starting on page I-9 of these instructions for more information.
Line 14e - RI Pass-through Entity Election Tax
Enter the amount of Rhode Island Pass-through Entity Election Tax from RI Schedule PTE, line 5.
Starting with tax years beginning on or after January 1, 2024, passthrough entities making the election to pay tax at the entity level for its members will calculate the tax using RI Schedule PTE and include the schedule with Form RI-1041.
See the RI Schedule PTE section starting on page I-10 of these instructions for more information.
Line 14f - Total Rhode Island Tax Add lines 14a through 14e.
Line 14g - Total Tax Total tax from page 1, line 14f.
Line 15a - RI Income Tax Withheld
Enter total amount of Rhode Island 2025 income tax withheld from RI Schedule W for RI-1041, line 16. (Attach the state copy of all forms W-2, 1099s, etc. showing Rhode Island withholding 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.
Withholding from a pass-through entity reported on a RI Schedule K- 1 should be entered on RI Schedule W for RI-1041 and included in the amount for Line 15a.
RI Schedule W for RI-1041, and all forms W-2, 1099s, RI Schedule K-1s, etc. showing Rhode Island withholding must be attached to Form RI-1041.
Line 15b - Estimated Tax Payments
Enter the amount of estimated payments made on 2025 Form RI- 1041ES and the amount applied from the fiduciary's 2024 return.
Line 15c - Nonresident Real Estate Withholding
Enter the amount of Rhode Island income tax withheld on sales of real estate located in Rhode Island.
Line 15d - Pass-Through Withholding Paid on the Behalf of the
Entity Enter the amount of any nonresident pass-through withholding payments made on the fiduciary's behalf by any pass-through entities. This amount should equal the Total Pass-through withholding amount from RI Schedule PTW - 1041, Part C, line 14v.
RI Schedule K-1s must also be attached reflecting the amount of income and withholding for the nonresident beneficiary.
Line 15e - Other Payments
Enter any other payments, including advance payments made with the fiduciary's application for an automatic extension of time to file (Form RI-8736). Attach a copy of Form RI-8736 to Form RI-1041.
Line 15f - Total Payments Add lines 15a, through 15e.
Line 15g - Previously Issued Overpayments
If filing an amended return, enter the amount of any prior overpayments for this tax period (whether refunded or carried forward previously).
Line 15h - Net Payments Subtract line 15g from line 15f.
Line 16a - Amount Due
If the amount on line 14g is greater than the amount on line 15h, subtract line 15e from line 14g and enter the balance due on line 16a.
Line 16b - Underestimating Interest
If the fiduciary owes underestimating interest, complete Form RI- 2210 and indicate the amount of interest due on line 16b.
Line 16c - Total Amount Due
Add lines 16a and 16b. This is the total amount the fiduciary owes. This amount is payable in full with the return. An amount due of less than five dollars ($5) need not be paid.
Line 17 - Overpayment
If the amount on line 15h is greater than the amount on line 14g, subtract line 14g from line 15h and enter the overpayment on line 17.
If there is an amount due on line 16b for underestimating interest, subtract line 16b from line 17.
If the amount of underestimating interest on line 16b is more than the amount of overpayment from line 17, subtract line 17 from line 16b and enter the result on line 16c.
Line 18 - Refund
Enter the amount of the overpayment on line 17 that is to be refunded. Refunds of less than $5.00 will not be paid unless specifically requested.
Line 19 - Overpayment to be applied to 2026
Enter the amount of overpayment on line 17, which is to be applied to the fiduciary's 2026 estimated tax.
Lines 20 through 25 - Beneficiary Information Enter in lines 20 through 25 the name, address, state of residence and social security number of each beneficiary. If additional space is required, attach a supporting schedule containing the required information.
Lines 26 through 31 - Allocation and Modification
Column A - Percent of Ownership Enter in column A the percentage of interest for each beneficiary of
SCHEDULE I BENEFICIARY INFORMATION ALLOCATION AND MODIFICATION
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the estate or trust.
Column B - Federal Income Enter in column B the amount of federal income attributable to each of the beneficiaries and the fiduciary. Multiply the percent of ownership in column A by the fiduciary's total federal income from RI-1041, page 1, line 1.
Column C - Modifications to Federal Income Enter in column C the amount of modifications to the income reported in column B for each of the beneficiaries and the fiduciary. Multiply the percent of ownership in column A by the fiduciary's net modifications from RI-1041, page 1, line 4.
Column D - Modified Federal Income Combine columns B and C. Add net increases or subtract net decreases.
Column E - Rhode Island Source Income Enter in column E the amount of Rhode Island source income included in the following column:
Nonresidents: Enter the amount of Rhode Island source income included in column B. Examples of Rhode Island source income include business conducted in RI, RI rental property, wages earned in RI and sale or exchange of RI property.
Residents: Enter the amount from column D in column E.
Line 32, Columns B through E - Total Add the amounts in each column and enter the total on line 32 of each column.
Line 33 - Modifications to Rhode Island Source Income
Enter the amount of modifications in column C included in Rhode Island source income reported on line 32, column E.
Line 34 - Modified Rhode Island Source Income
Combine lines 32, column E and line 33. Add net increases or subtract net decreases.
Line 35 - RI Allocation
Divide line 34 by line 32, column D (not greater than 1.000). Enter here and on page 1, line 9.
Form RI-1041MU can be found on the Division of Taxation's website at:
This schedule pertains only to the fiduciary of a resident estate or trust. The fiduciary of a resident estate or trust is entitled to a credit against its RI tax liability for income taxes paid to other states. The credit cannot exceed the Rhode Island tax on line 8.
If you are claiming credit for income taxes paid to more than one state, use Form RI-1041MU, Credit for Income Taxes Paid to Multiple States. Enter the applicable amounts from Form(s) RI- 1041MU onto this schedule.
Line 36 - Rhode Island Income Tax Enter the amount from page 1, line 8.
Line 37 - Income From Other State
Enter the amount of income reported to the other state.
If state income tax has been paid to more than one other state, prepare a separate calculation for each state on Form RI-1041MU. Enter the amount of income from other states from Form RI-1041MU, line 29.
If you need to use more than one Form RI-1041MU, add all of the line 29 amounts together and enter the total amount on line 41.
Line 38 - Modified Federal Total Income
Enter the amount from page 1, line 5.
Line 39 - Divide line 36 by line 37. If greater than 1.0000, enter 1.0000.
Line 40 - Tentative Credit Multiply line 35 by line 38.
Line 41 - Tax Due and Paid To Other State
Enter the amount of tax due and paid to the other state.
If state income tax has been paid to more than one other state, prepare a separate calculation for each state, on Form RI-1041MU. Enter the amount of credit from Form RI-1041MU, line 30.
If you need to use more than one Form RI-1041MU, add all of the line 30 amounts together and enter the total amount on line 41.
In the space provided for the name of state to which income taxes were due and paid enter "MU".
NOTE: You must attach a signed copy of the return filed with the other state(s). If you owe no tax to the other state(s) and are to be refunded all the taxes withheld or paid to the other state(s), enter $0.00 on line 40. If included on a composite filing in another state(s), you must attach a copy of the composite filing(s) showing your income and the taxes paid on your behalf.
Line 42 - Maximum Tax Credit: Enter the SMALLER of lines 36, 40 or 41. Enter here and on page 1, line 11.
RI Schedule W can be found on the Division of Taxation's website at:
If claiming Rhode Island income tax withheld on Form RI-1041, page 1, line 15a, RI Schedule W for RI-1041 must be completed and attached along with all W-2s,1099s, etc. and RI Schedule K-1s showing Rhode Island withholding.
Lines 1 - 15: Please complete columns A, B, C and D for each W-2, 1099 or RI Schedule K-1 showing Rhode Island withholding.
CREDIT FOR INCOME TAXES PAID TO ANOTHER STATE SCHEDULE W FOR RI-1041
RHODE ISLAND WITHHOLDING INFORMATION
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Column A: For all 1099s or RI Schedule K-1s being entered, enter the letter code from the chart on the bottom of Schedule W. Leave blank if information being entered is from a W-2.
Column B : For each W-2, 1099 and RI Schedule K-1s being entered, enter the name of the employer or payer.
Column C : For each W-2, enter the employer's state identification number from box 15 of the W-2. Note: The state identification number may be different than the employer's federal identification number. Be sure to enter the identification number from box 15, rather than box b of the W-2. For each 1099, enter the payer's federal identification number.
DO NOT ENTER MORE THAN 9 DIGITS FOR THE ID NUMBER. IF "00" FOLLOWS THE 9 DIGIT ID NUMBER, DO NOT ENTER THE "00".
Column D : For each W-2, 1099 or RI Schedule K-1, enter the amount of Rhode Island withholding as shown on each form. See chart on Schedule W for box reference.
Line 16 - Total Rhode Island Income Tax Withheld
Add the amounts from Column D, lines 1 through 15. Enter the total here and on RI-1041, line 15a.
Line 17 - Enter the number of W-2s, 1099s or RI Schedule K-1s entered on lines 1-15 showing Rhode Island income tax withheld.
Schedule W plus all W-2s, 1099s and RI Schedule K-1s with Rhode Island withholding must be attached to your Rhode Island return in order to receive credit for your Rhode Island withholding tax amount.
RI Schedule M can be found on the Division of Taxation's website at:
Modifications DECREASING Federal Total Income
Line 1a - Enter income from obligations of the United States
Government to the extent included in total income for federal tax purposes but exempt for state purposes. However, this amount shall be reduced by any investment interest incurred or continued on the obligation which has been taken as a federal itemized deduction. 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. R.I. Gen. Laws § 44-30-12(c)(1).
Line 1b - Rhode Island fiduciary adjustment under R.I. Gen. Laws § 44-30-17. A fiduciary adjustment is allowed for a beneficiary for income that maintains its character as it flows from the fiduciary. For example, if the estate or trust has tax exempt interest, the beneficiary would be allowed an adjustment for the tax exempt interest and would list that fiduciary adjustment on this line.
Line 1c - Elective deduction for new research and development facilities under R.I. Gen. Laws § 44-32-1.
Line 1d - 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 1e - Qualifying investment in a certified venture capital partnership under R.I. Gen. Laws § 44-43-2.
Line 1f - Family Education Accounts under R.I. Gen. Laws § 44-30- 25(f).
Line 1g - Tuition Saving Program (section 529 accounts) R.I. Gen. Laws § 44-30-12(c)(4) - 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.
Line 1h - 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 R.I. Gen. Laws § 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 1i - Depreciation that has not been taken for federal purposes because of the bonus depreciation that must be subtracted from
Rhode Island income R.I. Gen. Laws § 44-61-1.
Line 1j - Depreciation that has not been taken for federal purposes because of the increased section 179 depreciation was not taken originally - R.I. Gen. Laws § 44-61-1.1.
Line 1k - Allowable modification for performance based compensation realized by an eligible employee under the Rhode Island Jobs
Growth Act under R.I. Gen. Laws § 42-64.11-4.
Line 1l - Modification for exclusion for qualifying option under R.I. Gen. Laws § 44-39.3-1 AND modification for exclusion for qualifying securities or investments under R.I. Gen. Laws § 44-43-8.
Line 1m - Modification for Tax Incentives for Employers under R.I. Gen. Laws § 44-55-4.1.
Line 1n - Tax credit income claimed on Federal return exempt for
Rhode Island purposes: Historic Structures - Tax Credit income under R.I. Gen. Laws § 44-33.2-3(e)(2), Historic Preservation Tax Credits 2013 income under R.I. Gen. Laws § 44-33.6-3(f), Motion Picture Production Company Tax Credit income under R.I. Gen. Laws § 44-31.2-9(c), Musical and Theatrical Production Tax Credit income under R.I. Gen. Laws § 44-31.3-2(b)(6), Rebuild Rhode Island Tax Credit under § 44-64.20-5(m) and Rhode Island New Qualified Jobs Incentive Act 2015 under R.I. Gen. Laws § 44-48.3- 8(c).
Line 1o - Active duty military pay of Nonresidents stationed in Rhode
Island, as well as the income of their nonresident spouses for services performed in Rhode Island. Income for services performed by the service member's spouse in Rhode Island would be exempt from Rhode Island income tax only if the service member's spouse moves to Rhode Island solely to be with the service member complying with military orders sending him/her to Rhode Island. The service member and the service member's spouse must also share the same non- Rhode Island domicile.
RI SCHEDULE M FOR RI-1041
RI MODIFICATIONS TO FEDERAL TOTAL INCOME
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Page I-7 Not all income earned by the service member or his/her spouse is exempt from Rhode Island income tax. Non-military pay of the service member, as well as business income, gambling winnings or income from the ownership or disposition of real or tangible property earned from Rhode Island by either the service member or his/her spouse is still subject to Rhode Island income tax. Note: The military service member and/or his/her spouse may be asked to submit proof of residency to support taking this modification.
Line 1p - Recapture of Scituate Medical Savings Account modifications under R.I. Gen. Laws § 44-30-25.1(d)(1).
Line 1q - Amounts of insurance benefits for dependents and domestic partners included in Federal AGI pursuant to chapter 12 of title 36 or other cover age plan - R.I. Gen. Laws § 44-30-12(c)(6).
Line 1r - Rhode Island full-year residents only. Up to $10,000 in unreimbursed expenses for travel, lodging and lost wages incurred by an individual as a result of the individual donating one or more of his/her organs to another human being for organ transplantation under R.I. Gen. Laws § 44-30-12(c)(7). Modification can only be taken once during the lifetime of the individual and is taken in the year that the human organ transplantation occurs.
Line 1s - Taxable Social Security income under R.I. Gen. Laws § 44- 30-12(c)(8). Use the Social Security Modification worksheet to determine the amount of taxable social security income allowed as a decreasing modification. The Social Security Modification worksheet is available on our website, www.tax.ri.gov.
NOTE: THIS MODIFICATION IS NOT FOR ESTATES OR TRUSTS - FOR INDIVIDUALS ONLY
Line 1t - Modification up to $20,000 for taxable retirement income from certain pension plans or annuities under R.I. Gen. Laws § 44- 30-12(c)(9).
NOTE: THIS MODIFICATION IS NOT FOR ESTATES OR TRUSTS - FOR INDIVIDUALS ONLY
Line 1u - Deduction for Pass-Through Entity Tax claimed in prior years.
NOTE: THIS MODIFICATION IS NOT FOR ESTATES OR TRUSTS - FOR INDIVIDUALS ONLY
Line 1v - Modification for taxpayers receiving military service pensions under R.I. Gen. Laws § 44-30-12(c)(11).
NOTE: THIS MODIFICATION IS NOT FOR ESTATES OR TRUSTS - FOR INDIVIDUALS ONLY
Line 1w - Modification for taxpayers licensed under R.I. Gen. Laws § 21-28.6 and/or R.I. Gen. Laws § 21-28.11 for the amount of any expenditure eligible to be claimed as a federal income tax deduction but disallowed under 26 U.S.C. § 280E. R.I. Gen. Laws § 44-30- 12(c)(13).
Line 1x - Section 174A Amortization Adjustment for research and experimental expenditures [I.R.S. Code 174A] If you reported an addback for research and experiental expenditures in a prior tax year, you are allowed a maximum twenty percent deduction of the amount that was carried forward from a prior tax year.
Trust as the pass-through entity:
The trust must issue RI Schedule K-1(s) to its beneficiary(ies) indicating the amount the beneficiary(ies) is able to deduct.
See the instructions for RI Schedule 174A on page 13 for more information. RI Schedule 174A must be included with Form RI-1041.
Trust as a member of a pass-through entity:
If the trust is a member of a pass-through entity, the pass-through entity must issue the trust a RI Schedule K-1 indicating the amount you are allowed to deduct.
Enter the amount from RI Schedule K-1, Section III, line 9.
Line 1y - Total Modifications Decreasing Federal Total Income: Add lines 1a through 1x. Enter as a negative number here and on page 1, Form RI-1041, line 3.
M odifications INCREASING Federal Total Income
Line 2a - Enter income from obligations of any state or its political subdivision, other than Rhode Island under R.I. Gen. Laws § 44-30- 12(b)(1) and R.I. Gen. Laws § 44-30-12(b)(2).
Line 2b - Rhode Island fiduciary adjustment under R.I. Gen. Laws § 44-30-17. A fiduciary adjustment is allowed for a beneficiary for income that maintains its character as it flows from the fiduciary. For example, if the estate or trust has municipal bond interest from a state other than Rhode Island, the beneficiary would be allowed an adjustment for that municipal bond interest and would list that fiduciary adjustment on this line.
Line 2c - Recapture of Family Education Account Modifications under R.I. Gen. Laws § 44-30-25(g).
Line 2d - Bonus depreciation that has been taken for federal purposes that must be added back to Rhode Island income under R.I. Gen. Laws § 44-61-1.
Line 2e - Recapture of Tuition Savings Program modifications (section 529 accounts) under R.I. Gen. Laws § 44-30-12(b)(4).
Line 2f - Recapture of tax credit income previously claimed as a modification decreasing Federal AGI for Historic Structures - Tax Credit, Historic Preservation Tax Credits 2013, Motion Picture Production Company Tax Credits or Musical and Theatrical Production Tax Credits under R.I. Gen. Laws § 44-33.2-3(e)(2), R.I. Gen. Laws § 44-33.6-3(f), R.I. Gen. Laws § 44-31.2-9(5) and R.I. Gen. Laws § 44-31.3-2, respectively.
Line 2g - Recapture of Scituate Medical Savings Account modifications under R.I. Gen. Laws § 44-30-25.1(d)(3)(i).
Line 2h - If you and/or your spouse, if applicable, are a member or partner of a pass-through entity that has elected to pay Rhode Island tax on Form RI-PTE, enter the amount of tax paid on your behalf by that pass-through entity. The amount of tax paid on your behalf must be added back to your Federal Adjusted Gross Income. You cannot claim the amount paid on you and/or your spouse's, if applicable, behalf unless that same amount is also taken as a modification increasing federal adjusted gross income.
NOTE: THIS MODIFICATION IS NOT FOR ESTATES OR TRUSTS - FOR INDIVIDUALS ONLY
Line 2i - Unemployment compensation received but not included in federal adjusted gross income under R.I. Gen. Laws § 44-30- 12(b)(6).
NOTE: THIS MODIFICATION IS NOT FOR ESTATES OR TRUSTS - FOR INDIVIDUALS ONLY
Line 2j - Taxable portion of Paycheck Protection Program loan amount under R.I. Gen. Laws § 44-30-12(b)(8).
NOTE: THIS MODIFICATION IS NOT FOR ESTATES OR TRUSTS - FOR INDIVIDUALS ONLY
Line 2k - Addback of Federal P.L.119-21, H.R.1 Provisions Enter the Addback of Federal Provisions from 2025 RI Schedule HR1 - Entity, line 1f.
See the RI Schedule HR1 - Entity section on page I-12 of these instructions for more information.
Line 2l - Reserved for future use. This line should be left blank.
Line 2m - Total Modifications Increasing Federal Total Income: Add lines 2a through 2l. Enter here and on page 1, Form RI-1041, line 2.
This schedule can be found on the Division of Taxation's website at:
CURRENT YEAR OTHER RI CREDITS:
This credit schedule details "Other Rhode Island Credits" being used on your RI-1041. Each Rhode Island credit has its own line. On the appropriate line, enter the dollar amount of the credit being taken. The total of all credits will be entered on page 1, Form RI-1041, line 12.
Proper documentation must be submitted for each credit you are using or carrying forward.
If you are using amounts carried forward from prior years, attach a schedule showing the year of credit origination and any amounts used to date.
Any missing or incomplete documentation may cause a delay in processing your return.
Pursuant to R.I. Gen. Laws § 44-30-2.6(c)(3)(E), only the credits mentioned on this page are allowed as credits against Rhode Island Fiduciary Income Tax. No other credits can be allowed. This also pertains to any carry forward of a credit.
If the credit you are trying to use is not listed in this section that credit is no longer allowed against personal income tax. Entering an amount for an ineligible credit on one of these lines or on an attached statement will delay the processing of your return and result in the disallowance of the credit.
Line 1 - Historic Residence Credit - RI-0715 - for approved residence rehabilitation. Effective tax year 2017 and thereafter for unused carryforward amounts only. No new credits are authorized. In order to claim any unused credit, you must attach the original certification from the Historical Preservation & Heritage Commission, as well as a carryforward schedule showing the original amount of certified credit, the year of certification and the amount of credit used since certification. The credit used should be listed by year and amount of usage. Any unused credit may be carried forward until used. R.I. Gen. Laws § 44-33.1
Line 2 - Tax Credits for Contributions to Scholarship
Organizations - RI-2276 - for business entities that make contributions to qualified scholarship organizations. The entity must apply for approval of the tax credit and will receive a tax credit certificate issued by the RI Division of Taxation. The original certificate must be attached to the return. The credit must be used in the tax year that the entity made the contribution. Unused amounts CANNOT be carried forward. R.I. Gen. Laws § 44-62
Line 3 - Historic Structures - Tax Credit (Historic Preservation Investment Tax Credit) or Historic Preservation Tax Credits 2013 - RI-286B - for approved rehabilitation of certified historic structures. The original certificate must be attached to the return. Any unused credit amount may be carried forward for ten (10) years. R.I. Gen. Laws § 44-33.2 and R.I. Gen. Laws § 44-33.6, respectively.
Note: This credit is for holders of a Historic Preservation Investment Tax Credit certificate received under the state's Historic Structures program or Historic Preservation Tax Credits 2013 program. This credit is NOT for owners of historic residences who qualified under the Historic Homeownership Assistance Act - R.I. Gen. Laws § 44-33.1
Line 4 - Low Income Housing Tax Credits - RI-5442 - For eligible taxpayers having an ownership interest in a qualified low-income housing Rhode Island project that has been certified by, and received a tax credit certificate from, the Rhode Island Department of
Housing. The original certificate must be attached to the return. Any unused credit amount may be carried forward for four (4) years R.I. Gen. Laws § 44-71.
Line 5 - Rhode Island New Qualified Jobs Incentive Act 2015
Credit - RI 6754 - For Rhode Island businesses creating new fulltime jobs that did not previously exist in this state. The Rhode Island business must be approved by the Rhode Island Commerce Corporation and must possess a tax credit certificate issued by the RI Division of Taxation. The original certificate must be attached to the return. Any unused amounts may be carried forward for four (4) years. R.I. Gen. Laws § 44-48.3
Line 6 - Rebuild Rhode Island Tax Credit - RI 7253 - For Rhode Island businesses demonstrating that even though the business has committed capital investment or owner equity of at least 20% of the total project cost there exists a project financing gap which will likely cause the project not to be completed. The Rhode Island business must be approved by the Rhode Island Commerce Corporation and must possess a tax credit certificate issued by the RI Division of Taxation. The original certificate must be attached to the return. Any unused amounts may be carried forward for four (4) years. R.I. Gen. Laws § 42-64.20
Line 7 - Motion Picture Production Tax Credits or Musical and
Theatrical Production Tax Credits - RI-8201 - for certified production costs as determined by the RI Film and Television Office or the RI Division of Taxation. The original certificate must be attached RI SCHEDULE CR FOR RI-1041
OTHER RI CREDITS
Page I-8
to the return. Any unused credit amount may be carried forward for three (3) years. R.I. Gen. Laws § 44-31.2 and R.I. Gen. Laws § 44- 31.3
Line 8 - Stay Invested in RI Wavemaker Fellowship Tax Credits - RI-9283 - For eligible graduates working for a Rhode Island based employer in the field of life, natural or environmental sciences: computer, information or software technology: advanced mathematics or finance: engineering: industrial or other commercially related design: or medicine or medical device technology. The graduate must be approved by the Rhode Island Commerce Corporation and must possess a tax credit certificate issued by the RI Division of Taxation. The original certificate must be attached to the return. Any unused amounts may be carried forward for four (4) years. R.I. Gen. Laws § 42-64.26
Line 9 - TOTAL CREDITS - Add lines 1 through 8. Enter here and on RI -1041, page 1 line 12.
RECAPTURE OF OTHER RI CREDITS:
If a Rhode Island credit amount must be recaptured, enter the credit number, the credit name, and the amount of the credit to be recaptured in the space provided on lines 10 and 11.
Line 12 - TOTAL AMOUNT OF CREDIT TO BE RECAPTURED -
Add lines 10 and 11. Enter here and on RI-1041, page 1, line 14b.
This schedule can be found on the Division of Taxation's website at:
Pursuant to R.I. Gen. Laws § 44-11-2.2. Pass-through entities, A pass-through entity shall withhold income tax at the highest Rhode Island withholding tax rate provided for individuals or seven percent (7%) for corporations on the member's share of income of the entity that is derived from or attributable to sources within this state distributed to each nonresident member and pay the withheld amount to the R.I. Division of Taxation.
If a nonresident member's only source of income within Rhode Island is from one or more pass-through entities, that nonresident member may elect to be included in a composite return to satisfy the nonresident pass-through withholding requirement under R.I. Gen. Laws § 44-11-2.2.
For tax years beginning on or after January 1, 2023, Rhode Island pass-through withholding of a pass-through entity with nonresident partners, members, beneficiaries and shareholders will be reported and calculated using RI Schedule PTW - 1041 as part of Form RI- 1041 replacing Form RI-1096PT.
RI Schedule PTW - 1041 is not required to be filed if there are no nonresident beneficiaries of the pass-through entity. The schedule must be completed and included if there is at least one (1) nonresident beneficiary.
The pass-through entity is required to include RI Schedule PTW - 1041 showing the amount of Rhode Island withholding for all nonresident members for whom Rhode Island taxes were withheld. This does not include any nonresident members who made the election on Form RI-1040C-NE to file a composite return (RI-1040C) or elected to file on RI Schedule PTE - Pass-through Entity Election.
Entities with beneficiaries making elections on RI-1040C-NE or RI Schedule PTE must complete Form RI-1040C and/or RI Schedule PTE before completing RI Schedule PTW - 1041.
When submitting RI Schedule PTW - 1041 with Form RI-1041, the pass-through entity must attach all corresponding RI Schedule K-1s .
If any of the following exceptions apply to the pass-through entity, check the applicable box at the top of the form and enter the amount of income associated with the exception on the appropriate line under Part B. Cannot distribute funds due to Federal or State restrictions • Exempt from income tax • Nonresident member(s) with less than $1,000.00 in Rhode • Island source income All Rhode Island source income for the nonresident mem• ber(s) is being reported on Form RI-1040C - Composite Income Tax Return. A pass-through entity election was made and all Rhode • Island source income for the nonresident member(s) is being reported on RI Schedule PTE.
If the pass-through entity cannot distribute funds due to Federal or state restrictions, a statement explaining what is prohibiting the distribution of the funds along with all of the corresponding RI Schedule K-1s containing all required information.
If all the nonresident members of the pass-through entity have Rhode Island source income less than $1,000.00, RI Schedule PTW - 1041 must be filed reporting the Rhode Island source income of all nonresident members on line 1, calculating the pass-through withholden due and listing the Rhode Island source income of all members on line 7. All of the corresponding RI Schedule K-1s should show the nonresident members' withholding as zero.
Part A - Nonresident Rhode Island Source Income Calculation
Line 1 - Enter the pass-through entity's income distribution deduction from Federal Form 1041, line 18.
Line 2 - Enter the amount of Rhode Island source income included in the amount on line 1.
Line 3 - Enter the nonresident portion of Rhode Island source income included in the amount on line 2.
Part B - Pass-through Withholding Calculation
Line 4 - Using the amount of Rhode Island source income for all nonresidents from line 3, e nter the amount attributed to nonresident members that are C Corporations on line 4a and that are Sub S
Corporations, Individuals, LLCs, Partnerships and Trusts on line 4b. Lines 4a and 4b must equal line 3.
For lines 5 through 9: Use the appropriate column(s) based on entity type and enter the Rhode Island source of income of the nonresident member(s) not subject to pass-through withholding on RI Schedule PTW - 1041. RI SCHEDULE PTW - 1041
PASS-THROUGH WITHHOLDING TRANSMITTAL SCHEDULE
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Column A: C Corporations Column B: Sub S Corporations, Individuals, LLCs, Partnerships and Trusts.
Line 5 - Enter the amount of Rhode Island source income for all nonresident members of the pass-through entity which cannot be distributed due to Federal or State restrictions.
Line 6 - Enter the amount of Rhode Island source income for all nonresident members of the pass-through entity exempt from tax.
Line 7 - Enter the amount of Rhode Island source of income of those nonresident members with income less than $1,000 net modifications.
Line 8 - Enter the amount of the Rhode Island source of income of nonresident members being reported on Form RI-1040C - Composite
Income Tax Return.
Line 9 - Enter Rhode Island source of income of those nonresidents being reported on Form RI-PTE - Pass-through Entity Election.
Line 10 - Rhode Island source income of nonresident members subject to PT withholding
Column A, subtract the amounts from lines 5a - 9a from line 4a. Column B, subtract the amounts from lines 5b - 9b from line 4b.
Line 11 - Rhode Island pass-through withholding rate. For C corporations only, the rate is 7.0%. For Sub S corporations, individuals, LLCs, partnerships and trusts, the rate is 5.99%.
Line 12 - For each column, m ultiply the amount of Rhode Island source income of those nonresidents from line 10 by the passthrough withholding rate on line 11 to calculate the pass-through withholding amount.
Line 13 - Add lines 12a and 12b. Enter here and on Form RI-1041, 14d.
Part C - Pass-through Withholding Paid on Entity's behalf by another Pass-through Entity
Part C must be completed if claiming an amount on Form RI-1041, page 2, line 15d. Attach a separate sheet if additional room is needed. In addition, a copy of RI Schedule K-1 issued to the entity must be attached in order for credit to be given. Failure to attach a copy will result in the disallowance of the pass-through withholding amount until documentation is provided.
Enter the amount of any nonresident pass-through withholding payments made on the entity's behalf by another pass-through entity.
This schedule can be found on the Division of Taxation's website at:
Pursuant to R.I. Gen. Laws § 44-11-2.3. Pass-through entities - Election to pay state income tax at the entity level, for tax years beginning on or after January 1, 2019, a pass-through entity may elect to pay the state tax at the entity level at the rate of five and ninety-nine hundredths percent (5.99%).
Pass-through entity" means a corporation that for the applicable tax year is treated as an S Corporation under I.R.C. 1362(a) (26 U.S.C. § 1362(a)), or a general partnership, limited partnership, limited liability partnership, trust, limited liability company or unincorporated sole proprietorship that for the applicable tax year is not taxed as a corporation for federal tax purposes under the state's regulations.
An election can be made by the pass-through entity on behalf of an individual who is a shareholder of an S Corporation; a partner in a general partnership, a limited partnership, or a limited liability partnership; a member of a limited liability company, a beneficiary of a trust; or a sole proprietor.
If a pass-through entity elects to pay an entity tax under this subsection, the entity shall not have to comply with the provisions of R.I. Gen. Laws § 44-11-2.2 regarding withholding on non-resident owners.
NOTE: A trust may elect to pay the state tax at the entity level at the rate of five and ninety-nine hundredths percent (5.99%) on behalf of its beneficiary(ies). However, a trust that is a member of a pass-though entity may not be included in an election made by that pass-through entity to pay the state tax at the entity level at the rate of five and ninety-nine hundredths percent (5.99%) on behalf of its members since the trust itself is not an individual as required under R.I. Gen. Laws § 44-11-2.3.
For tax years beginning on or after January 1, 2024, the Rhode Island pass-through entity [the trust] that makes a pass-through entity election for the beneficiary(ies) will report and calculate the passthrough entity income and tax using RI Schedule PTE as part of Form RI-1041 rather than using Form RI-PTE.
RI Schedule PTE is required to be filed if the trust is making the election to pay the pass-through entity tax on behalf of its beneficiary(ies).
The trust will also be required to report the pass-through entity tax paid on behalf of and income passed through to the beneficary(ies) on RI Schedule K-1.
Entity Accounting Method
Check the method of accounting - Accrual or Cash Basis - being used by the pass-through entity to calculate the amount required to be taken as an increasing modification on the personal income tax returns of the beneficary(ies) of the pass-through entity.
Determining the Amount of the State Tax Credit for the Pass-through Entity
For tax years beginning on or after January 1, 2025, the State tax credit amount shall be ninety percent (90%) of the amount of tax paid by the pass-through entity, at the entity level, which is passed through to the owners, on a pro rata basis.
Regardless of the Accounting Method used by the pass-through enti-
RI SCHEDULE PTE PASS-THROUGH ENTITY ELECTION
Page I-10
Page I-11 ty making the pass-through entity election, the amount of tax paid by the pass-through entity is equal to the amount calculated for line 5 of RI Schedule PTE.
NOTE: The tax amount must be paid in order to receive the credit.
Determining the Amount of the State Tax Credit for the Pass-through Entity Member(s)
To determine the amount of state tax credit for the pass-through entity member(s), multiply the Allowable State Tax Credit from RI Schedule PTE, Part C, line 2 by the percent of ownership for each pass-through entity member. This is the amount each pass-through entity member will report on RI Schedule W when filing Form RI- 1041.
Determining the Amount of Income Required to be Reported by the Pass-through Entity
Cash Basis Pass-through Entity:
The amount required to be reported as income by the pass-through entity member(s) is the member's apportioned share of the total of payments made by the pass-through entity DURING the tax year of the return being filed in relation to the pass-through entity tax.
For example, a calendar year ending pass-through entity makes four estimated tax payments on the following dates - April 15, June 15, September 15 and December 15. The cash basis pass-through entity also makes an extension payment and a payment following the end of the calendar year.
The cash basis pass-through entity member(s) must report the apportioned share of the total of the four estimates paid during the calendar year as an increasing modification on RI Schedule M, line 2h.
In addition, a cash basis pass-through entity member(s) may take a decreasing modification on RI Schedule M, line 1v for the amount of pass-through entity tax claimed in the prior year which was an overpayment calculated on the RI Schedule PTE when filed.
If the pass-through entity is a cash basis entity as shown on the entity's federal return and Form RI-1041 for tax year 2024 had an overpayment related to RI Schedule PTE that was refunded to the entity, use the following to determine the decreasing modification amount.
Tax Year 2024 Overpayment Refunded to the Entity If the pass-through entity's tax year 2024 had an overpayment that was refunded to the entity, the entity would be expected to include that refund as income on its tax year 2025 corporate filings enabling the individual taxpayer to claim a decreasing modification in tax year 2025 IF the individual taxpayer previously accounted for the tax year 2024 refund as part of the payments made in calendar year 2024 AND properly claimed the payments as an increasing modification in tax year 2024. If any part of the 2024 overpayment was due to payments made within calendar year 2025, the individual taxpayer should not have accounted for those payments as part of the 2024 increasing modification because the payments were made within 2025.
Accrual Basis Pass-through Entity: The amount required to be reported as income by the pass-through entity is the total of payments made by the pass-through entity FOR the tax year of the return being filed minus any overpayment on the return.
For example, a calendar year ending pass-through entity makes four estimated tax payments on the following dates - April 15, June 15, September 15 and December 15. The accrual basis pass-through entity also makes an extension payment and a payment following the end of the calendar year.
The accrual basis pass-through entity must report the total of the four estimates, the extension payment and the payment made with the return as an increasing modification on RI Schedule M, line 2h.
If the payments made for the tax year exceeds the amount of tax on line 5, the total amount of payments must be reduced by the overpayment amount regardless of whether the overpayment is refunded or carried forward.
Part A - Pass-through Entity Election Tax Calculation
Line 1 - Enter the pass-through entity's total amount of income distribution from Federal Form 1041, line 18 apportioned to Rhode Island.
Note: This amount should equal the amount reported on line 2 of RI Schedule PTW if both schedules are being filed.
Line 2 - Enter the total percentage of economic benefit received by each individual member of the pass-through entity who is making this election.
Note #1: This percentage should only represent the total of the beneficiary(ies) of the pass-through entity that are individuals. Portions related to non-individual beneficiary(ies) should not be included in this amount.
Note #2: This percentage should not include portions related to individual beneficiary(ies) who are not making the pass-through entity election.
The percentage of the economic benefit for line 2 must be recalculated based on their total amount of income for each beneficiary making the pass-through entity election compared to the trust's income.
Line 3 - Multiply the Total Pass-through Entity Income apportioned to Rhode Island on line 1 by the total percentage of economic benefit on line 2 to calculate the Pass-through Entity income generated by the individuals making the pass-through entity election.
Line 4 - Individual tax rate is 5.99%.
Line 5 - Pass-through Entity Election Tax. Multiply line 3 by line 4. Enter on this line, as well as on Form RI-1041, line 14e.
Note: For tax years beginning on or after January 1, 2025, ninety percent (90%) of this amount is what will be passed through to the beneficiary(ies) of the pass-through entity. See "Determining the Amount of the State Tax Credit for the Pass-through Entity" on page 10 and "Determining the Amount of the State Tax Credit for the Passthrough Entity Member(s)" on page 11 of these instructions for additional information.
Part B - Additional Information
Line 1 - Enter the amount of Rhode Island pass-through entity tax included on US Form 1041, line 11.
Part C - Allowable State Tax Credit
Line 1 - Enter the amount of Rhode Island Pass-through Entity Election Tax from Part A, line 5.
Line 2 - Allowable State Tax Credit. Multiply line 1 by ninety percent (0.90). This is the maximum amount of credit that can be passed through to beneficiary(ies) of the pass-through entity.
See "Determining the Amount of the State Tax Credit for the Passthrough Entity" on page 11 and "Determining the Amount of the State Tax Credit for the Pass-through Entity Member(s)" on page 11 of these instructions for additional information.
This schedule can be found on the Division of Taxation's website at:
With the passage of P. L. 119-21, H.R.1, 119th Cong. (2025) the following items taken as deductions on your Federal return are to be added back in order to determine your Rhode Island Taxable Income.
• Business interest expense deduction [I.R.S. Code 163(j)] • Section 174A Amortization Adjustment for research and experimental expenditures [I.R.S. Code 174A] • Depreciation of business assets [I.R.S. Code 179(b)] • Qualified sound recording production deduction [I.R.S.Code 181]
Using RI Schedule H.R.1 - Entity, each trust or estate filing Form RI-1041 is required to add back any of these deductions that are included on its Federal return.
The estate or trust will also be required to report these items to each of its beneficiary(ies) using RI Schedule K-1. Each beneficiary's RI Schedule K-1 must list the beneficiary's respective share of each item required to be added back so that the beneficiary can include that amount on their income tax return.
Beneficiary(ies) must report their respective share of each item on RI Schedule H.R.1 - Individual and attach RI Schedule K-1 to the return.
Line 1a - Interest expense deduction [I.R.S. Code 163(j)] For Rhode Island income tax purposes, the interest expense deduction will remain limited to the amount allowable prior to the passage of P.L. 119-21, H.R.1 119th Cong. (2025).
If your Federal 1041 includes a deduction for the business interest expense that is more than what was allowed prior to the enactment of P.L. 119-21, H.R.1 119th Cong. (2025), you must add back that additional amount of business interest expense.
Trust as the pass-through entity: If the estate or trust reports its own additional business interest expense on Federal Form Form 1041, it must add back that additional amount.
Enter that additional amount that is included on Federal Form 1041, line 10.
Trust as a member of a pass-through entity:
If you are a member of a pass-through entity, the pass-through entity must issue you a RI Schedule K-1 indicating the amount of additional business interest expense that must be added back. Enter that additional amount from RI Schedule K-1, Section II, line 5.
Line 1b - Section 174A Amortization Adjustment for research and experimental expensing [I.R.S. Code 174A] Research and experimental expenditures must still be amortized for Rhode Island income tax purposes.
If your Federal 1041 reports full expensing of domestic research and experimental expenditures, you will be required to complete RI Schedule 174A to determine the amount of research and experimental expenditures that must be added back to federal taxable income for Rhode Island purposes. and include it with your return whether filed on paper or electronically.
Trust as the pass-through entity: If the estate or trust reports its own accelerated amortization of research and experimental expenditures on Federal Form 1041, the estate or trust will be required to complete RI Schedule 174A and include it with its return whether filed on paper or electronically.
Complete RI Schedule 174A to determine the amount of research and experimental expenditures that must be added back to Federal Taxable Income. Enter the amount from RI Schedule 174A, line 4 on this line. Any amount not allowed as a deduction for the a given tax year may be carried forward.
A separate amortization schedule must be maintained for Rhode Island purposes using RI Schedule 174A.
Future amortization deductions may not exceed twenty percent of the initial addback each subsequent year a deduction is taken as allowed by law.
Trust as a member of a pass-through entity:
If you are a member of a pass-through entity, the pass-through entity must issue you a RI Schedule K-1 indicating the amortization adjustment amount that must be added back.
Enter that additional amount from RI Schedule K-1, Section II, line 6.
Line 1c - Depreciation of business assets [I.R.S. Code 179(b)] If your Federal 1041 return includes an additional deduction for depreciation of assets under 26 U.S.C § 179(b) than what was allowed prior to the enactment of H.R.1 that additional depreciation amount must be added back on RI Schedule HR1 - Entity.
Trust as the pass-through entity: If the estate or trust reports its own additional deduction for depreciation of assets under 26 U.S.C § 179(b) on Federal Form 1041, it must add back that additional deduction.
Trust as a member of a pass-through entity:
If you are a member of a pass-through entity, the pass-through entity must issue you a RI Schedule K-1 indicating the addition depreciation amount that must be added back.
Enter that additional amount from RI Schedule K-1, Section II, line 7.
Line 1d - Qualified sound recording production deduction [I.R.S.Code 181] If your Federal 1041 return includes an additional deduction of qualified sound recording production equipment under 26 U.S.C § 181 than what was allowed prior to the enactment of H.R.1 that additional deduction must be added back on RI Schedule HR1 - Entity form.
Trust as the pass-through entity: If the estate or trust reports its own additional deduction amount of qualified sound recording production equipment under 26 U.S.C § 181 on Federal Form 1041, it must add back that additional deduction.
Trust as a member of a pass-through entity:
If you are a member of a pass-through entity, the pass-through entity must issue you a RI Schedule K-1 indicating the addition depreciation amount that must be added back. RI SCHEDULE H.R.1 - ENTITY ADDBACK OF FEDERAL P. L. 119-21, H.R.1 PROVISIONS Page I-12
Example: Amortization Schedule for Rhode Island Purposes Enter that additional deduction amount from RI Schedule K-1, Section II, line 8.
Line 1e - Reserved for future use
Leave this line blank.
Line 1f - Total amount of P. L. 119-21, H.R.1 deductions. Add lines 1a through 1e. Enter here and on RI Schedule M, line 2k.
This schedule can be found on the Division of Taxation's website at:
RI Schedule 174A must be filed with Form RI-1041 if: • A business owner files Federal Form 1041 reporting accelerated amortization of research and experimental expenditures (RI Schedule HR-1 - Entity must also be filed.) • A business owner files Federal Form 1041 reporting an addback for research and experimental expensing in a prior year.
For tax year 2025, indicate whether or not the partnership made an election to amortize Section 174A research and experimental expenditures.
If yes, mark the "Yes" checkbox, and stop there. Include RI Schedule 174A with your Form RI-1041.
If no, mark the "No" checkbox and complete the schedule.
NOTE: If you do not make the election to amortize, you will be required to maintain a separate amortization schedule for Rhode Island purposes. See the amortization schedule example below.
Part 1: Amortization Schedule
Line 1 - Enter the amount of Section 174A research and experimental expenditures claimed on Federal Form 1041.
Line 2 - Complete the Amortization Schedule by reporting in the columns provided: the Description of Costs, the Date Amortization Begins, the Amortizable Amount, the applicable Code Section, the Period or Percentage, and the Amortization for the Year.
If you have multiple research and experimental expenditures that you incurred and started to amortize in tax year 2025, break them out in the schedule provided.
Column (a) - Description of Costs: Enter a brief description of the research and experimental expenditures that you incurred and started to amortize in tax year 2025. Column (b) - Date Amortization Begins: Enter the date that you began to amortize the costs in tax year 2025.
Column (c) - Amortizable Amount: Enter the total cost of the research and experimental expenditures that you incurred and started to amortize in tax year 2025.
Column (d) - Code Section: Enter 174A.
Column (e) - Period / %: Enter the amortization term.
Column (f) - Amortization for the Year - Enter the amount of research and experimental expenditures allowed to be amortized for Rhode island purposes for tax year 2025. Divide the Amortizable Amount from Column (c) by the Amortization term from Column (e) provided in years or multiply the Amortizable Amount from Column (c) by the Amortization term from Column (e) provided as a percentage.
Line 3 - Enter the total amount allowable to be amortized for tax year 2025 for Rhode Island purposes.
Line 4 - Amount required to be added back on Form RI-1041. Subtract the amount on line 3 from line 1. Enter here and on line 1b of RI Schedule HR1 - Entity.
Part 2: Rhode Island Amortization Deduction Amount If you are an eligible small business taxpayer with annual gross revenues of $31 million or less. [H.R. 1 P.L. 119-21 § 70302(f)] and you began amortizing Section 174A research and experimental expenditures in tax year 2022, 2023 and/or 2024, you are allowed a deduction for Rhode Island purposes.
All others are allowed a deduction for Rhode island purposes for tax year 2025 for amortizing Section 174A research and experimental expenditures in tax year 2025
For each year allowable, enter the Amortization %, the Amortizable Amount and the Annual Rhode Island Amount.
Amortization %: Enter the amortization percentage for the Section 174A research and experimental expenditures for the year.
Amortizable Amount: Enter the total cost of the research and experimental expenditures that you incurred and started to amortize.
Annual Rhode Island Amount: Enter the amount of research and experimental expenditures allowed to be amortized for Rhode island purposes for tax year 2025.
Line 5 - Rhode Island Amortization Deduction Amount. Add the Annual Rhode Island Amounts for all years. Enter here and on RI Schedule M - 1041, line 1x. RI SCHEDULE 174A -
AMORTIZATION ADJUSTMENT FOR RESEARCH AND EXPERIMENTAL EXPENDITURES
Updated 12/08/2025 Page I-13
Trust consists of four (4) beneficiaries: #1 Resident - 25% (making PTE election); #2 Nonresident - 25% (making PTE election); #3 Nonresident - 25.00%; #4 Nonresident - 25% Page I-14
RI Schedule PTW RI Schedule PTE While the beneficiaries are equal shareholders in the trust because the one resident beneficiary and one of the nonresident beneficiaries are making the pass-through entity election, the percentage of the economic benefit for line 2 must be recalculated based on their total amount of income compared to the trust's income.
In the example, the resident's income of $107,356 is 0.5626 out of the $190,825 and the nonresident's income of $27,823 is 0.1458 out of the $190,825. Therefore, the percentage on line 2 is 0.7084. Page I-15
Source: official text