§ 44-30-71. Requirement of withholding tax from wages. (a) General. Every employer maintaining an office or transacting business within this state and making payment of any wages subject to Rhode Island personal income tax to a resident or nonresident individual shall deduct and withhold from the wages for each payroll period a tax computed in such manner as to result, so far as practicable, in withholding from the employee's wages during each calendar year an amount substantially equivalent to the tax reasonably estimated to be due resulting from the inclusion in the employee's Rhode Island income of his or her wages received during the calendar year. The method of determining the amount to be withheld shall be prescribed by regulations of the tax administrator, with due regard to the withholding exemptions of the employee.

(b) Withholding exemptions. For purposes of this section:

(1) An employee shall be entitled to the equivalent of the same number of Rhode Island withholding exemptions as the number of withholding exemptions to which he or she is entitled for federal income tax withholding purposes. An employer may rely upon the number of federal withholding exemptions claimed by the employee.

(2) The amount of the equivalent of each Rhode Island withholding exemption shall be equal to and correspond to those set forth in 26 U.S.C. § 3402(b).

(c) Electronic filing. Any person required to withhold and remit tax under this section with ten (10) or more employees must make the payments by electronic funds transfer or other electronic means defined by the tax administrator. The tax administrator shall adopt rules necessary to administer a program of electronic funds transfer or other electronic filing system.

(1) In the case of failure of a person required to deposit taxes by electronic funds transfer or other electronic means defined by the tax administrator under the provisions of this section, unless it is shown that such failure is due to reasonable cause and not due to willful neglect, there shall be added to the amount shown as tax required to have electronically transferred five percent (5%) of the amount or five hundred dollars ($500) per required payment, whichever is less.

(2) The tax administrator is authorized to waive the electronic filing requirement in a given year for persons who can show that filing electronically will cause undue hardship.

History of Section. (P.L. 1971, ch. 8, art. 1, § 1; P.L. 1971, ch. 204, art. 3, § 1; P.L. 1977, ch. 134, § 1; P.L. 2009, ch. 68, art. 16, § 10.)