Unemployment and Temporary Disability Insurance Taxes (FUTA/SUTA/TDI); Temporary Caregiver Insurance (TCI): Rhode Island

Federal law and guidance on this subject should be reviewed together with this section.

Author: Brian J. Lamoureux, Pannone Lopes Devereaux & West LLC

Summary

• Rhode Island uses the Internal Revenue Service's Common Law Test to determine who is an employee for employment tax purposes. See Common Law Test.
• Rhode Island law defines wages for state unemployment insurance (SUI) purposes as all compensation paid for personal services, including commissions, bonuses, tips, the cash value of all compensation paid in any noncash medium, and all other compensation subject to a federal tax against which a credit may be taken for contributions into a state unemployment fund. See SUI Taxable Wages and Taxable Wage Base.
• The SUI tax rates are based on one of nine tax rate schedules. Each employer's SUI rate is calculated annually based on the individual employer's previous experience as reflected by SUI contributions, taxable wages, benefit charges, and prorated charges and credits to their reserve account. All employers also pay a Job Development Assessment, which is credited to the state's Job Development Fund. See Contribution Rates; Experience Rating Method and Job Development Assessment.
• The Rhode Island anti-SUTA dumping law mirrors the federal SUTA Dumping Prevention Act. See SUTA Dumping.
• Certain Rhode Island employers are permitted to make a voluntary contribution to lower their assigned contribution rate for the ensuing rate year, within a specified time period. See Voluntary Contributions.
• Employers must file the quarterly contribution and wage reports to report employee wages subject to SUI. Some employers must file these returns electronically. Penalties are imposed for noncompliance. See Quarterly Reporting Requirements.
• An employer's account will not be relieved of benefit charges due to overpayments caused by the employer's, or its agent's, failure to respond timely or adequately to requests for information. See Benefit Overpayments.
• Employers are required to keep certain payroll records for SUI purposes that provide a true and accurate account of all workers and all payments made for at least four years. See Recordkeeping Requirements.
• All Rhode Island employers, except public agency employers, must participate in the Temporary Disability Insurance (TDI) program, which is a state-run plan administered by the Department of Labor and Training. The program is funded by taxes withheld from employees' wages up to the annual TDI taxable wage base. TDI due dates are based on an employer's unemployment insurance due dates. See Temporary Disability Insurance.
• The state-run Temporary Caregiver Insurance (TCI, or paid family leave law) program provides employees with wage replacement when an employee takes leave to care for certain family members or to bond with a new child. The compensation is funded through employee payroll deductions. Employers do not contribute to the program. See Temporary Caregiver Insurance.