Rhode Island LLC Taxes: The Complete Filing Guide (2025)

Rhode Island LLC Tax Basics

Navigating your Rhode Island LLC tax obligations doesn’t have to be complicated. We’ll walk you through the essentials of pass-through taxation, explain Rhode Island’s specific requirements, and highlight strategies to stay compliant and organized. This guide covers everything from federal income taxes to city-specific requirements and filing deadlines.

Use the links below to jump directly to the section you need:

• Rhode Island LLC Taxes at a Glance
• Understanding LLC Taxation Basics
• Federal Tax Obligations
• Rhode Island State Taxes
• Tax Calendar and Filing Tips
• Tax Strategies for Rhode Island LLCs
• Forms and Resources

Rhode Island LLC Taxes at a Glance

Tax Type	Rate	Filing Deadline	Forms Required
Federal Income Tax	10-37% (personal brackets)	April 15, 2025	Form 1040 + Schedule C or Schedule E/K-1
Self-Employment Tax	15.3%	April 15, 2025	Schedule SE
Rhode Island Personal Income Tax	3.75%–5.99%	April 15, 2025	Form RI-1040
Rhode Island Corporate Income Tax	7% ($400 minimum)	April 15, 2025	Form RI-1120C
Federal Payroll Taxes (If Employees)	7.65% employer + 7.65% employee (FICA)	Quarterly (April 30, July 31, October 31, January 31)	Form 941
Rhode Island Unemployment Tax (If Employees)	1.1%–9.7%% (new employers: 1.21%)	Quarterly	Form TX-17-25
Federal Unemployment (FUTA)	6% on first $7,000 per employee (0.6% after credits)	January 31, 2026 (annual)	Form 940
Sales & Use Tax	7%	Monthly or quarterly	Form RI-STR
Rhode Island Pass-Through Entity Tax (PTET)	5.99% ($400 minimum)	March 15, 2025	RI‑Schedule PTE
Annual Report	$50 fee	May 1, 2025	Form 632

Understanding LLC Taxation Basics

How Rhode Island LLCs Are Taxed By Default

Your Rhode Island LLC doesn’t pay taxes itself. Instead, profits flow through to you and your members, who report them on personal tax returns. This is called pass-through taxation.

Here’s how it works:

1. Your LLC earns income from business activities
2. The LLC itself files no tax return (unless you elect otherwise)
3. Profits “pass through” to members based on ownership percentage
4. Each member reports their share on their personal tax return
5. Members pay tax at their individual income tax rates

What this means for you: Unlike corporations, your business profits are only taxed once, which typically saves money.

Tax Classification Options

While pass-through taxation is the default, your Rhode Island LLC can choose alternative tax treatments:

Default LLC Tax Status:

• Single-member LLC: Taxed as a sole proprietorship
• Multi-member LLC: Taxed as a partnership

Optional Tax Classifications:

• S Corporation: Can reduce self-employment taxes by paying “reasonable salaries”
• C Corporation: LLC pays corporate tax on profits, members pay personal tax on distributions (creates double taxation)

Rhode Island Pass-Through Entity Tax Option:

• Optional tax that allows LLCs taxed as partnerships or S Corps to pay tax at the entity level
• Can help overcome the $10,000 SALT deduction limitation
• Must be elected annually (does not carry over)

Not sure which tax classification is right for your business? Schedule a free consultation with 1-800Accountant.

Federal Tax Obligations

Income Tax

As a Rhode Island LLC owner, you’ll report your share of business profits on your personal tax return using:

• Form 1040 + Schedule C (single-member LLCs)
• Form 1040 + Schedule E + Schedule K-1 (multi-member LLCs)

Federal income tax rates range from 10% to 37% based on your tax bracket (actual brackets will depend on inflation adjustments and any tax law changes).

Simply Put: Whatever money your business makes (after expenses) gets added to your personal tax return, just like income from a job.

Self-Employment Tax

LLC members actively involved in the business must pay self-employment tax of 15.3% (covering Social Security and Medicare) on their share of LLC profits.

Key points:

• Applies to net earnings of $400 or more
• Calculated on Schedule SE
• You can deduct 50% of the self-employment tax as an “above-the-line” deduction, which lowers your adjusted gross income

What happens if I miss this payment? The IRS charges penalties of 0.5% per month plus interest. However, first-time mistakes can often qualify for penalty abatement if you have a clean compliance history.

Employment Taxes

If your LLC has employees, you must:

• Withhold federal income tax
• Pay and withhold FICA taxes (7.65% each for employer and employee)
• Pay federal unemployment tax (FUTA)
• File quarterly employment tax returns (Form 941)
• Provide W-2 forms annually

Estimated completion time: 2-3 hours per quarter (significantly less with payroll software or professional help)

Estimated Tax Payments

Because no tax is withheld from your LLC profits, you’ll likely need to make quarterly estimated tax payments using Form 1040-ES. These payments cover both income and self-employment taxes on your share of the business income. Missing deadlines or underpaying can lead to IRS penalties, even if you pay in full later.

Working with an accountant can help ensure accurate calculations, on-time payments, and a smarter overall tax strategy.

Key deadlines:

• April 15
• June 16
• September 15
• January 15

Pro Tip: Set calendar reminders 15 days before each deadline. This gives you time to prepare without the last-minute rush that leads to mistakes.

Rhode Island State Taxes

Rhode Island Personal Income Tax

Rhode Island has a graduated personal income tax rate of 3.75% to 5.99% that applies to your LLC’s profits on your personal return.

Filing requirements:

• Use Rhode Island Form RI-1040
• Due April 15, 2025
• Rhode Island follows federal adjusted gross income as a starting point

Bottom Line: For every $1,000 your LLC earns, you should expect to pay somewhere between $37.50 and $59.90 in Rhode Island state income tax (in addition to federal taxes).

Rhode Island Pass-Through Entity Tax

This optional tax can benefit many Rhode Island LLC owners:

• Tax rate: 5.99% (same as personal rate)
• Paid by your LLC instead of individual members
• Members receive a tax credit on their personal returns
• Helps bypass the $10,000 SALT deduction limitation
• Use RI-Schedule PTE and submit with your LLC’s income tax return 
• Due March 15, 2025
• Applies only to the current tax year and does not carry over automatically

Real Savings Example: For an LLC with $200,000 in profits, the Pass-Through Entity Tax could save owners up to $8,880 in federal taxes by working around the SALT deduction cap.

Rhode Island Corporate Income Tax

LLCs that elect to be taxed as C corporations for federal purposes are subject to Rhode Island’s 7% corporate income tax.

Filing requirements: 

• Minimum tax of $400 (applies even if the business earns no income)
• Use Rhode Island Form RI-1120C
• Due April 15, 2025 

Note: LLCs taxed as S corporations, partnerships, or disregarded entities are not subject to the 7% corporate tax but must still pay Rhode Island’s $400 minimum annual tax.

Sales and Use Tax 

If your Rhode Island LLC sells physical products or certain services:

• Collect 7% sales tax on all taxable sales
• Register for a sales tax permit through the Rhode Island Division of Taxation
• File and pay collected taxes monthly or quarterly based on sales volume
• Use Rhode Island Form RI-STR 

60-Second Check: Do I Need to Collect Sales Tax?

• Do you sell physical products in Rhode Island? → Yes, collect tax
• Do you sell digital products? → Generally not taxable
• Do you provide services? → Most services are exempt (see exceptions below)
• Do you sell online to Rhode Island customers? → Yes, collect tax

Services typically exempt from sales tax include:

• Professional services (legal, accounting)
• Personal services (haircuts, fitness training)
• Medical services

Products typically subject to sales tax include:

• Tangible personal property
• Prepared food
• Some digital products

Payroll Taxes 

If you have employees in Rhode Island, you will be responsible for two types of payroll taxes. 

Unemployment Insurance (UI) Tax 

• Register through the RI Department of Labor and Training 
• Rate is 1.21% for new employers (1.1% to 9.7% afterwards) 
• Due quarterly 

Withholding Tax 

• Register through the RI Division of Taxation
• Rate is 3.75%-5.99% (use the state’s withholding tax tables to determine rates)
• Due weekly, monthly, or quarterly (filing frequency assigned by the state)

Annual Report Filing

While not a tax, your Rhode Island LLC must file an annual report with the Rhode Island Secretary of State.

• Due by May 1, 2025
• $50 filing fee
• Filed online through the Rhode Island Business Services portal
• $25 late fee if not filed on time

Calendar Alert: Set a reminder for April 1 to ensure you don’t miss this easy but required filing.

Tax Calendar and Filing Tips

Key Deadlines for Rhode Island LLCs

January:

• January 15: Final estimated tax payment for previous year
• January 31: Issue W-2s/1099s to employees/contractors

• January 31: Fourth quarter federal payroll tax payment due 
• January 31: Rhode Island UI tax due 

March:

• March 15: Rhode Island PTET election and/or return due

April:

• April 15: Personal tax returns due

• April 15: First quarter estimated tax payment due 
• April 15: Rhode Island Corporate Income Tax return due 

• April 30: First quarter federal payroll tax payment due
• April 30: Rhode Island UI tax due 

May: 

• May 1: Rhode Island Annual Report due

June: 

• June 16: Second quarter estimated tax due 

July: 

• July 31: Rhode Island UI tax due 
• July 31: Second quarter federal payroll tax payment due 

September:

• September 15: Third quarter estimated tax payment due

October:

• October 31: Rhode Island UI tax due 
• October 31: Third quarter federal payroll tax payment due

Record-Keeping Checklist

Keep these records for at least seven years:

• Business income records (invoices, receipts)
• Expense receipts and documentation
• Bank and credit card statements
• Asset purchase and improvement records
• Vehicle mileage logs
• Home office documentation
• Payroll records
• Previous tax returns

Tax Strategies for Rhode Island LLCs

S Corporation Election Benefits

Converting your LLC to an S Corporation for tax purposes can save on self-employment taxes:

1. File Form 2553 with the IRS
2. Pay yourself a “reasonable salary” subject to employment taxes
3. Take remaining profits as distributions exempt from self-employment tax

Example: An LLC making $100,000 in profit pays 15.3% self-employment tax on the entire amount. As an S Corp, if $60,000 is a reasonable salary and $40,000 is taken as distributions, only the $60,000 is subject to employment taxes.

Potential Savings: In this example, you’d save about $6,120 in self-employment taxes.

Pass-Through Entity Tax Election

Consider electing Rhode Island’s Pass-Through Entity Tax if:

• You’re affected by the $10,000 SALT deduction cap
• Your LLC generates significant pass-through income
• All members agree to the election

Business Expense Deductions

Common deductions Rhode Island LLC owners often overlook:

• Home office deduction
• Business mileage (70¢ per mile for 2025)
• Health insurance premiums
• Retirement plan contributions
• Professional development expenses
• Business meals (50% deductible)

Forms and Resources

Federal Tax Forms

• Schedule C: Profit or Loss From Business (sole proprietors)
• Form 1065: U.S. Return of Partnership Income
• Schedule K-1: Partner’s Share of Income, Deductions, Credits
• Form 1120-S: U.S. Income Tax Return for an S Corporation
• Form 2553: Election by a Small Business Corporation (S Corp)
• Form 8832: Entity Classification Election

Rhode Island Tax Forms

• Form RI-1040: Rhode Island Personal Income Tax Return
• Form RI-1120C: Rhode Island Corporate Income Tax Return
• Form RI-STR: Rhode Island Sales and Use Tax Return
• RI‑Schedule PTE: Rhode Island Pass-Through Entity Tax Election Form

Helpful Resources

• Rhode Island Division of Taxation
• Rhode Island Tax Portal
• Rhode Island Secretary of State
• Internal Revenue Service