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Does Rhode island have a state inheiritence Tax
State/Country relating to question: Rhode Island Already Tried: Iam wondering if the state of Rhode Island have an inheirtance tax.
Hello shylo,Rhode Island does not have an inheritance tax, but it does have a separate estate tax. Inheritance tax would be paid by the beneficiaries of an estate, while estate taxes are paid by the estate itself.Estates which exceed the value of $675,000 are subject to RI estate taxes. The rate of tax which applies is a progressive rate which increases with the value of the estate, with a maxium tax rate of 16%. Once the estate taxes have been paid, the remaining assets pass to the beneficiaries with no further inheritance tax being due.If this was helpful please press the Accept button. Positive feedback is also appreciated.Thank you shylo
Accountant
25+ years tax consulting. Specializing in returns for US citizens living abroad
Iam a little confused by your answer Iam a beneficiary of an estate,that was filed in California and all the estate taxes were paid on the estate there,and Iam wondering if Rhode Island will charge me A tax because it was filed somewhere else.Am I subject to that separate estate tax you mentioned in your answer.
Hello shylo,Can you please clarify for me if you are a resident of Rhode Island?Was the inheritance you received from someone who lived in California?
Yes, Iam a Rhode Island resident and yes, the person did live in California.
Hello again shylo,The RI inheritance tax would not apply in your situation. It only applies to decedents who die in the state of RI or to nonresidents who own property in the state. As a resident of RI who inherited assets from someone in CA, you are not subject to any RI estate taxes.
What about income tax on this inheritance.
Hello again shylo,Inheritances that you receive are not subject to income taxes. If the inheritance you received was subject to any state or federal estate or inheritance taxes, those are the only taxes that are ever paid. Once those taxes are paid, the inheritance is not subject to any further federal or state income taxes and does not even need to be reported on your tax returns.
One thing I would like to add here. The inheritance itself is not subject to income tax. However, if you now invest that money in a savings account or CD or other investments, any money the account earns from here on out would be subject to regular income taxes. But the initial inheritance itself is not subject to income taxes.