Rhode Island Division of Taxation Forms & Instructions
RI-1065 Partnership / Pass-Through Entity 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 1065, line 15 [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 8 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 9 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.
See page 6 for additional information.
GENERAL INFORMATION
RETURN DUE DATE: For all filers except for calendar year and non-June 30 fiscal year end single-member LLC filers, Form RI-1065 is due on or before the fifteenth day of the third month following the close of the taxable year.
For calendar year and non-June 30 fiscal year end single-member LLC filers, Form RI-1065 is due on or before the fifteenth day of the fourth month following the close of the taxable year.
NOTE: If filing a final return, a separate request for a letter of good standing for dissolution or withdrawal should also be filed. Attach the final return to the request form and follow the instructions for section V or VI. The final return and request form must be completed through the date of withdrawal. When filing for dissolution or withdrawal, an extension is not valid. Within thirty (30) days of the date of the letter, it must be recorded with the Secretary of State.
ELECTRONIC MANDATE: The R.I. Division of Taxation has an electronic mandate that requires Larger Business Registrants use electronic means to file returns and remit taxes.
See page 10 for additional information on this mandate.
INFORMATION SECTION
Enter the requested entity information on the top of the form: Federal employer identification number • RI Secretary of State ID number • Taxable year • If the entity is not a calendar year filer, enter the beginning • and end dates of the entity's fiscal year. Name • Address, • E-mail address • NAICS code • Type of return being filed • Entity type • Number of RI K-1s issued •
LIMITED LIABILITY COMPANY FILERS:
(i) If the LLC is to be treated as a corporation for federal tax purposes, it shall pay a tax the same as a "C" corporation and file Form RI- 1120C.
(ii) If the LLC is to be treated as a subchapter S corporation for federal tax purposes, it shall pay a fee equal to the minimum tax as defined under R.I. Gen. Laws § 44-11-2(e) and file Form RI-1120S.
(iii) All other LLCs shall pay a fee equal to the minimum tax as defined under R.I. Gen. Laws § 44-11-2(e) and file Form RI-1065.
Check the "LLC" box in the "Entity type" section.
If the LLC is a single member LLC for federal tax purposes, check the "SMLLC" box and NOT the "LLC" box in the "Entity type" section.
LIMITED LIABILITY PARTNERSHIPS, LIMITED PARTNERSHIPS
OR PARTNERSHIP FILERS:
(i) If the LLP or LP is to be treated as a corporation for federal tax purposes, it shall pay a tax the same as a "C" corporation and file Form RI-1120C.
SPECIFIC INSTRUCTIONS
(ii) If the LLP or LP is to be treated as a partnership for federal tax purposes, it shall pay a fee equal to the minimum tax as defined under R.I. Gen. Laws § 44-11-2(e) and file Form RI-1065.
In the "Entity type" section, LLPs check the "LLP" box, LPs check the "LP" box, and general partnerships check the "Partnership" box. Check only one box in this section. For example, if the entity type is a SMLLC, check SMLLC, not LLC, and not both SMLLC and LLC.
SOLE PROPRIETOR FILERS:
Form RI-1065 includes an Entity Type check box for a Sole Proprietor.
The Sole Proprietor check box is to be used solely for an individual who is a Sole Proprietor and who has made a pass-through entity election. This allows the Sole Proprietor to make the pass-through entity election. The Sole Proprietor is not subject to the $400 annual fee.
In addition to completing RI Schedule PTE and RI Schedule K-1, the filing for a Sole Proprietor only requires lines 7d through lines 16 of the Form RI-1065 be completed.
When filing a return for a Sole Proprietor be sure to include all four pages of Form RI-1065, RI Schedule PTE and RI Schedule K-1.
When the Sole Proprietor files a personal income tax return they must be sure to include RI Schedule K-1 to document the amount of the pass-through entity tax paid on their behalf and claimed on RI Schedule W.
TOTAL NUMBER OF K-1S ISSUED To aid in proper reporting of partner, member, or shareholder information on RI Schedule K-1s there are fields to use to report a count of the number of K-1s issued by the entity for the tax year.
Total number of RI K-1s issued: Enter the total number of RI Schedule K-1s issued by the entity for the tax year.
Total number of RI K-1s issued for Schedule PTE: Enter the total number of RI Schedule K-1s issued by the entity for the tax year that are reporting RI Schedule PTE (Pass-through Entity Election) information in Section VI of RI Schedule K-1.
Total number of RI K-1s issued for Schedule PTW: Enter the total number of RI Schedule K-1s issued by the entity for the tax year that are reporting RI Schedule PTW (Pass-through Withholding) information in Section IV of RI Schedule K-1.
Enter the following information in the corresponding boxes:
Gross Receipts: The gross receipts from U.S. Form 1065, page 1, line 1a or other applicable Federal form.
Depreciable Assets: The depreciable assets from line 10a, column (c), Schedule L, U.S. Form 1065, page 4 or other applicable Federal form.
Total Assets: Enter the total assets from line 15, column (d), Schedule L, U.S. Form 1065, page 4 or other applicable Federal form.
SCHEDULE A - COMPUTATION OF TAX
TAXABLE INCOME
Line 1 - Federal Taxable Income
Enter the taxable income as it appears on Federal Form 1065, Schedule K, line 1 from the Analysis of Net Income (Loss) section or line 31 from Federal Form 1040 or 1040-SR, Schedule C, or other applicable Federal form.
Line 2 - Total Deductions Enter Total Deductions from page 3, Schedule B, line 1g.
Line 3 - Total Additions Enter Total Additions from page 3, Schedule C, line 1h.
APPORTIONED TAXABLE INCOME
Line 4 - Adjusted Taxable Income
Subtract the total deductions amount on line 2 from the Federal Taxable Income amount on line 1. Add to that the total additions amount on line 3.
Line 5 - Rhode Island Apportionment Ratio Complete Schedule I on page 5. Enter the amount from Schedule I, line 5.
Line 6 - Apportioned Rhode Island Taxable Income
Multiply your adjusted taxable income amount from line 4 times the Rhode Island Apportionment Ratio from line 5.
If the entity type is a general partnership, enter 0.00 on lines 7a and 7b. No annual fee is due from an entity filing as a general partnership. Form RI-1065 must still be filed even though no annual fee is due and must determine any pass-through withholding due on the Rhode Island source income of all nonresident members.
Line 7a - Rhode Island Annual Fee
Enter the amount of $400.00 on this line. Pursuant to R.I. Gen. Laws § 44-11-2(e), the minimum tax imposed shall be $400.00.
Line 7b - Jobs Growth Tax
Enter 5% of the aggregate performance-based compensation paid to eligible employees as per the Jobs Growth Act ( R.I. Gen. Laws § 42-64.11-5).
Line 7c - Pass-Through Withholding
Enter Rhode Island Pass-Through Withholding from RI Schedule PTW, Line 13.
Starting with tax years beginning on or after January 1, 2023, passthrough entities will calculate pass-through withholding for its nonresident members using RI Schedule PTW and including the schedule with Form RI-1065.
See the RI Schedule PTW section starting on page 5 of these instructions for more information. SPECIFIC INSTRUCTIONS - page 2
Line 7d - 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-1065.
See the RI Schedule PTE section starting on page 6 of these instructions for more information.
Line 8a and 8b - Rhode Island Total Tax/Fee and Withholding Add lines 7a through 7d.
Line 9a - Estimated Tax Payments
Enter the total estimated tax payments made with respect to the taxable year, if any, including any overpayment allowed from the preceding taxable year.
Line 9b - Rhode Island Pass-through withholding paid on the entity's behalf Enter the total amount of any nonresident pass-through withholding paid on the entity's behalf by another pass-through entity as required under R.I. Gen. Laws § 44-11-2.2. Pass-through entities. This amount should equal the Total Pass-through withholding amount from RI Schedule PTW, Part C, line 14v.
RI Schedule K-1s must also be attached reflecting the amount of income and withholding for the nonresident beneficiary.
Line 9c - Nonresident withholding on real estate sales in 2025
Enter the amount of Rhode Island income tax withheld on sales of real estate located in Rhode Island.
Line 9d - Other Payments
Enter the amount of all other tax payments (i.e. extension payment) made with respect to the taxable year.
Note: Rhode Island pass-through entity election payments MAY NOT be claimed by LLCs, LLPs, LPs, partnerships or SMLLCs on Form RI-1065 since they themselves are passthrough entities. LLCs, LLPs, LPs, partnerships and SMLLCs must complete their own RI Schedule PTE as part of Form RI- 1065 and pass any pass-through withholding payments through to their members/shareholders.
Line 10 - Total Payments Add the amounts from lines 9a through 9d..
Line 11 - Net Tax Due Subtract the amount on line 10 from the amount on line 8b.
Line 12 - Interest and Penalty Calculation
Enter the total of (a), (b) and (c) on this line.
(a) Interest on the balance due
For failure to pay the tax on time, interest at the rate of 12% (0.1200) per year; or 1.0% (0.0100) per month, shall be assessed.
Interest shall accrue on the amount from line 12 at the rate of 12% per annum from the due date for filing the return to the actual date of payment. (b) Penalty on the balance due
For failure to file the return on time , a penalty at the rate of 5% (0.0500) per month not to exceed 25% (0.2500) shall be assessed.
For failure to pay the tax on time , a penalty at the rate of 0.5% (0.0050) per month not to exceed 25% (0.2500) shall be assessed. Delinquency charge: LLCs, LPs, and LLCs are subject to a $100.00 charge if the annual fee is not paid by the due date.
(c) Interest for underpayment of estimated taxes In the case of any underpayment of the estimated taxes by an entity there shall be added to the tax as the case may be for the taxable year, an amount determined at the rate of 12% per annum upon the amount of the underpayment for the period of the underpayment. The amount of the estimated payments made for the tax year must equal at least eighty (80%) percent of the current year tax amount, or one hundred (100%) percent of the prior year tax amount, whichever is less. In addition, unless using the annualization of income method, total payments and withholding for each quarter must be at least equal to one quarter of the amount of tax in order to avoid underestimating interest. An overpayment or underpayment from the immediately preceding quarter should be applied to the next quarter when determining the overpayment or underpayment for that quarter.
Line 13 - Total Due with the Return
Add lines 11 and 12. The amount is due and payable when the return is filed. See the Electronic Mandate section at the end of these instructions for information on how to file your return and remit payment.
Line 14 - Overpayment
If line 10 is more than line 8b, this is the amount of your overpayment. If there is an amount due on line 12c, subtract that amount from your overpayment.
If the amount on line 12c is more than your overpayment, enter the amount on line 13. This amount is due and payable when the return is filed.
Line 15 - Amount to be Applied to 2026 Estimated Tax
Enter the amount of the overpayment from line 14 that is to be credited against next year's estimated tax. The amount on this line may be adjusted by the Tax Administrator.
Line 16 - Amount to be refunded. Subtract line 15 from line 14.
SCHEDULE B - DEDUCTIONS
Line 1a - Exempt Interest
Enter the amount of interest exempt from Rhode Island tax included on line 5, Schedule K of Federal 1065.
Line 1b - Bonus Depreciation Adjustment
Enter the amount of adjustment which represents the difference between normal first year depreciation and residual depreciation as long as depreciation lasts.
Line 1c - Modification for Tax Incentives for Employers
Enter the amount of modification allowed under R.I. Gen. Laws § 44- SPECIFIC INSTRUCTIONS - page 3
SPECIFIC INSTRUCTIONS - page 4 55. Attach Form RI-107 and required documentation to the return.
Line 1d - Cash Basis Only - Deductions for Pass-Through Tax
Claimed Enter the amount of deductions allowed for Pass-Through Entity Tax claimed in prior year.
See the RI Schedule PTE section starting on page 6 of these instructions for more information.
Line 1e - 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 Enter the modification amount of adjustment for eligible expenditures disallowed under 26 U.S.C. § 280E.
Line 1f - Section 174A Amortization Adjustment
Enter the amount of adjustment for research and experimental expenditures from 2025 RI Schedule 174A, line 5.
See the RI Schedule 174A section starting on page 9 of these instructions for more information.
Line 1g - Total Deductions Add lines 1a through 1f. Enter here and on page 1, Schedule A, line 2.
SCHEDULE C - ADDITIONS
Line 1a - Interest
Enter the gross amount of interest income received or accrued with respect to all obligations of any state, territory or possession of the United States or any political subdivision of the foregoing, or the District of Columbia other than Rhode Island or its political subdivisions not included on line 5, Schedule K of Federal 1065.
Line 1b - Bonus Depreciation Adjustment
Enter the entity's bonus depreciation amount less its normal depreciation amount.
Line 1c - Intangible Addback
Enter the total amount of interest expenses and costs and intangible expenses and costs that must be added back under R.I. Gen. Laws § 44-11-11(f).
Line 1d - Pass-Through Entity Tax Elected to be Paid
Enter the amount the Pass-Through Entity Tax Elected to be paid under R.I. Gen. Laws § 44-11-2.3.
See the RI Schedule PTE section starting on page 6 of these instructions for more information.
Line 1e - Taxable portion of Paycheck Protection Program
Enter the taxable portion of Paycheck Protection Program loan under R.I. Gen. Laws § 44-11-11.
Line 1f - 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 H.R.1 - Entity section on page 8 of these instructions for more information. Line 1g - Reserved for future use. Leave this line blank.
Line 1h - Total Additions Add lines 1a through 1g. Enter here and on page 1, Schedule A, line 3.
SCHEDULE D - RHODE ISLAND CREDITS
If the entity has credits passing through to its members, complete RI Schedule CR-PT - Other RI Credits for RI-1065 & RI-1120S filers.
SCHEDULE E - OTHER DEDUCTIONS TO FEDERAL TAXABLE INCOME
Line 1 - Elective Deduction for New Research and Development Facilities - Refer to R.I. Gen. Laws § 44-32-1 for more details.
Line 2 - Capital Investment Deduction -
R.I. Gen. Laws § 44-43-2 - Rhode Island General Laws provide for a deduction for purposes of computing net income in accordance with R.I. Gen. Laws § 44-11, for investments in certified venture capital partnerships. Taxpayers claiming this deduction for investments in certified venture capital partnerships must provide copies of certification from the Department of Economic Development of the Venture Capital Partnership. A recapture of a previously take deduction may be necessary under the law. This should be done by listing the recaptured amount as a negative number.
SCHEDULE I - ALLOCATION FACTOR
Prior to considering your apportionment factors, Regulation 280-RICR-20-25-11 and R.I. Gen. Laws § 44-11-13 should be considered to determine whether a company has the ability to apportion its Rhode Island adjusted taxable income. All apportionment factors should be filled out even if your apportionment is 100% Rhode Island.
If utilizing an alternative allocation apportionment as allowed under R.I. Gen. Laws § 44-11-14.1, §44-11-14.2, §44-11-14.3, §44-11-14.4, §44-11-14.5 or §44-11-14.6, check the box above the apportionment schedule.
Line 1 - Average Net Book Value Factor
Real and tangible personal property owned is valued at book value. Real and tangible personal property rented is valued at 8 times the annual net rental rate. The annual net rental rate shall be reduced (but not to less than zero) by the annual rental rate received from subrentals.
"Tangible personal property" means such property as machinery, tools, implements, goods, wares, and merchandise. It does not include cash, shares of stock, bonds, notes, credits, or evidences of an interest in property and evidences of debt.
Line 2 - Receipts Factor
2a) 100% allocation to Rhode Island of the gross receipts from sales of tangible personal property sold in the regular course of business where Rhode Island (or any other state or place) is the place of origin and Rhode Island is the destination. Sales of tangible personal prop-
SPECIFIC INSTRUCTIONS - page 5 erty are in Rhode Island if the property is delivered or shipped to a purchaser within this state regardless of the free on board (F.O.B.) point or other conditions of the sale.
Gross income from services is attributed to Rhode Island if the services are performed in Rhode Island.
Pursuant to R.I. Gen. Laws § 44-11-14(a)(2)(i)(B), gross sales of tangible personal property where shipments are made from an office, store, warehouse, factory or other place of storage in this state and the taxpayer is not taxed in the state of purchase must now be included in the Receipts section of the Rhode Island apportionment column. This gross receipts amount must be listed separately as shown on the apportionment schedule.
2b) Dividend income. This amount should not be included in 2(h).
2c) Interest income. This amount should not be included in 2(h).
2d) Gross rental income from the leasing or renting of real and tangible personal property.
2e) Royalty income associated with Rhode Island activities.
2f) Net income from the sale of real property, tangible personal property, or other capital assets not held by the taxpayer for sale to customers in the regular course of business.
2g) Net income from the sale or disposition of securities or financial obligations. Do not include related dividends or interest. Dividends and interest are reported on line 2(b) and 2(c).
2h) Gross income from all other receipts includes income from all other sources (not listed above) and includes (but is not limited to) receipts from patents, royalties, copyrights, commissions, dividends and interest. Gross income from royalties is attributable to Rhode Island to the extent that the patent or copyright is used in this state by the person paying royalties to the taxpayer. A patent is used in Rhode Island to the extent that it is employed in fabrication, manufacturing, production or other processing in Rhode Island or to the extent that a patented product is produced in Rhode Island. A copyright is used in Rhode Island to the extent that printing or other publication originates in Rhode Island. Accordingly, all such gross income should be included in Schedule I, line 2(h), Column A. For corporations organized under Rhode Island laws, all gross income from interest and dividends must be shown on Schedule I, lines 2(b&c), Column A.
2i) Income exempt from federal taxation.
Line 3 - Salaries and Wage Factor
Schedule I, line 3, Column A represents that part of the total wages, salaries and other compensation to officers and employees paid or incurred by the taxpayer during the taxable year which is assignable to offices, agencies, or places of business within the State of Rhode Island, or which is attributable to services performed in connection with the taxpayer's activities or transactions within this state during the taxable year.
Line 4 - Rhode Island Ratios Total the Rhode Island ratios from lines 1f, 2k and 3b.
Line 5 - Allocation Factor
If dollar amounts for property, receipts and salaries exist in Column B, the total of the three ratios on line 4 should be divided by 3. If one factor is not found in Column B, then the total of the two ratios on line 4 must be divided by 2. If only one factor exists in Column B, then the ratio on line 4 should be carried to line 5. Also, enter this ratio on page 1, Schedule A, line 5.
RI SCHEDULE PTW
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 as part of Form RI-1065 rather than using Form RI-1096PT.
RI Schedule PTW is not required to be filed if there are no nonresident members of the pass-through entity. The schedule must be completed and included if there is at least one (1) nonresident member.
The pass-through entity is required to include RI Schedule PTW 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 shareholders 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.
When submitting RI Schedule PTW with Form RI-1065, the passthrough 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, attach a statement explaining what is prohibiting the distribution of the funds along with all of the corresponding RI 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 must be filed reporting the Rhode Island source income of all nonresident members on line 1, calculating the pass-through withholding 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 apportioned Rhode Island taxable income from Form RI-1065, line 6.
Line 2 - Enter the profit percentage or current year allocation percentage of all members/partners that are nonresidents.
Line 3 - Multiply the apportioned Rhode Island taxable income on line 1 by the profit percentage or current year allocation percentage of all nonresident members/partners from line 2 to calculate Rhode Island source income for all nonresidents.
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.
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 RI Schedule PTE - Pass-through Entity Election.
If claiming an amount on this line, RI Schedule PTW and RI Schedule PTE must be included with your RI-1065 filing. Note: If RI Schedule PTE includes income of residents and nonresidents, be sure to only include that of nonresidents making the passthrough entity election on this line.
Line 10 - Rhode Island source income of nonresident members subject to pass-through 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 line 11 to calculate the pass-through withholding amount.
Line 13 - Add lines 12a and 12b. Enter here and on Form RI-1065, line 7c.
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-1065, page 2, line 9b. Attach a separate sheet if additional room is needed. In addition, a copy of all RI Schedule K-1s 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.
RI SCHEDULE PTE
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%).
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.
RI Schedule PTE must be completed and included with Form RI- 1065 if the entity is making the election to pay the pass-through entity tax on behalf of its partners, members or shareholders.
RI Schedule PTE will report and calculate the pass-through entity's income and tax. The pass-through entity making the pass-through entity election must issue a RI Schedule K-1 to each partner, member, and shareholder for whom it is making the election.
Each RI Schedule K-1 issued to a partner, member, or shareholder must include the tax paid on behalf of the partner, member, or shareholder, as well as the increasing modification amount for the partner, member, or shareholder, if applicable.
SPECIFIC INSTRUCTIONS - page 6
SPECIFIC INSTRUCTIONS - page 7 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 partners, members, and shareholders of the passthrough 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%) 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 entity 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-1040 or Form RI-1040NR.
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.
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-PTE for tax year 2024 had an overpayment 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 apportioned to Rhode Island from Form RI-1065, line 6.
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 any member(s) of the pass-through entity that are individuals. Portions related to nonindividual member(s) should not be included in this amount.
Note #2: This percentage should not include portions related to individual member(s) who are not making the pass-through entity election.
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-1065, line 7d.
SPECIFIC INSTRUCTIONS - page 8 Part B - Additional Information
Line 1 - Enter the amount of Rhode Island pass-through entity tax included on US Form 1065, line 14.
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 the member(s) of the pass-through entity.
See "Determining the Amount of the State Tax Credit for the Passthrough Entity" and "Determining the Amount of the State Tax Credit for the Pass-through Entity Member(s)" on page 7 of these instructions for additional information.
.RI SCHEDULE H.R.1 - ENTITY
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 partnership filing Form RI- 1065 is required to add back any of these deductions that are included on your Federal return.
The partnership will also be required to report these items to each of its partner(s) using RI Schedule K-1. Each partner's RI Schedule K- 1 must list the partner(s)'s respective share of each item required to be added back so that the partner can include that amount on their income tax return.
Individual partner(s) 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 1065 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.
Enter the additional business interest expense that is reflected on Federal Form 1065, line 15 on this line.
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 1065 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.
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.
See the instructions for RI Schedule 174A on page 9 for more information.
Enter the amount from RI Schedule 174A, line 4 on this line.
Line 1c - Depreciation of business assets [I.R.S. Code 179(b)] If your Federal 1065 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.
This amount will be reflected on Federal Form 4562 and reported on Federal Form 1065, Schedule K, line 12.
Enter that additional deduction amount that is included on Federal Form 1065 on this line.
Line 1d - Qualified sound recording production deduction
[I.R.S.Code 181] If your Federal 1065 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.
This amount will be reflected on Federal Form 4562 and will be reflected as part of the "Other deduction" reported on Federal Form 1065, Line 21,
Enter that additional deduction amount that is included on Federal Form 1065 on this line.
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 Form RI-1065, Schedule C, line 1f.
SPECIFIC INSTRUCTIONS - page 9 .RI SCHEDULE 174A -
AMORTIZATION ADJUSTMENT FOR RESEARCH AND EXPERIMENTAL EXPENDITURES
RI Schedule 174A must be filed with Form RI-1065 if: Federal Form 1065 is filed reporting accelerated amortization of • research and experimental expenditures (RI Schedule HR-1 - Entity must also be filed.) Federal Form 1065 is filed 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-1065.
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 in the next column.
Part 1: Amortization Schedule
Line 1 - Enter the amount of Section 174A research and experimental expenditures claimed on Federal Form 1065.
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-1065. 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 Form RI-1065, Schedule B, line 1f.
Example: Amortization Schedule for Rhode Island Purposes
SPECIFIC INSTRUCTIONS - page 10
ELECTRONIC MANDATE
The R.I. Division of Taxation has an electronic mandate that requires Larger Business Registrants use electronic means to file returns and remit taxes beginning on January 1, 2023.
A "larger business registrant" is defined as any person who:
1) Operates as a business whose combined annual liability for all taxes administered by the Division of Taxation for the entity is or exceeds $5,000; or
2) Operated as a business whose annual gross income is over $100,000 for the entity.
If you meet either of the above criteria you are required to file returns and remit taxes electronically.
Visit the RI Division of Taxation's website for additional information.
YOU MAY BE SUBJECT TO A PENALTY FOR
FAILURE TO FILE RETURNS AND/OR REMIT PAYMENTS VIA ELECTRONIC MEANS.
If you are subject to the electronic mandate, you must attach all required document(s) and schedule(s) to your electronic filing. Updated 11/06/2025
2025 RI-1065 - Rhode Island Business Corporation Tax Return SPECIFIC INSTRUCTIONS - page 11 Reporting of income across schedules. Entity consists of seven (7) members: #1 Nonresident - 12.50% (making PTE election); #2 Resident - 10.00% (making PTE election); #3 Nonresident - 25.00%; #4 Nonresident - 25%; #5 Nonresident - 10.00%; #6 Nonresident - 15.00% (1040C election); #7 Resident - 2.50% (making PTE ele ction) RI Schedule PTW RI Schedule PTE
Source: official text