Monday, December 23, 2019

Here Are A Few Things to Note For MA & RI State Returns

William Delaney, EA
Westwood, MA
MA – Effective 2020, the individual rate returns to 5%. At the same time, the charitable contribution deduction also returns (remember that one from 2001?). Since the deduction is linked to the federal Schedule A amount, only those who itemize on their federal 1040 will be eligible for this state benefit. The federal health care penalty is now a thing of the past. However, as President Ron Fisher recently reminded your Editor, a penalty still applies on the MA return (it pre-dates the former federal rule). Taxpayer’s beware.

RI – The gremlins are at it once again---a new tax form! This time it is payroll related. All monthly remitters of state withholding tax must now also file an RI-941, effective for the quarter ended 3/31/2020. It’s a quarterly reconciliation of your monthly payments! My guess is that someone at the state DOR was looking for something to do. It’s a
function of Parkinson’s Law---work expands to fill the time available! Will there also be an annual reconciliation of the quarterly reconciliations? “They” aren’t saying as yet!

Also, did you know that withholding which is not paid-in electronically (i.e. paper check
payment) “will be subject to an addition to the tax, amounting to 5% of the withheld
tax…or $500, whichever is less.” “Returns not filed electronically will be subject to an
addition to the tax, a sum equal to $50.” RI is catching up to NY and MA.

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