(a) General. Subject to regulations of the tax administrator, if an individual changes his or her status during his or her taxable year from resident to nonresident, or from nonresident to resident, the individual shall file one return as a resident for the portion of the year during which the individual is a resident, and one return as a nonresident for the portion of the year during which the individual is a nonresident.
(b) Rhode Island income as resident and nonresident. The Rhode Island income for the portion of the year during which the individual is a resident shall be determined, except as provided in subsection (c) of this section, under part II of this chapter as if his or her taxable year for federal income tax purposes were limited to the period of his or her resident status. The Rhode Island income for the remaining portion of his or her taxable year during which the individual is a nonresident shall be determined, except as provided in subsection (c) of this section, under part III of this chapter as if his or her taxable year for federal income tax purposes were limited to the period of his or her nonresident status.
(c) (1) Special accruals. If an individual changes his or her status from resident to nonresident, the individual shall, regardless of his or her method of accounting, accrue for the portion of the taxable year prior to the change of status any items of income or deduction accruing prior to the change of status, if not otherwise properly includible, whether or not because of an election to report on an installment basis, or allowable for Rhode Island income tax purposes for that portion of the taxable year or for a prior taxable year. The amounts of the accrued items shall be determined with the applicable modifications described in § 44-30-12 as if the accrued items were includible or allowable for federal income tax purposes.
(2) If an individual changes his or her status from nonresident to resident, the individual shall, regardless of his or her method of accounting, accrue for the portion of the taxable year prior to the change of status any items of income or deduction accruing prior to the change of status, other than derived from or connected with Rhode Island sources, if not otherwise properly includible (whether or not because of an election to report on an installment basis) or allowable for federal income tax purposes for that portion of the taxable year or a prior taxable year. The amounts of the accrued items shall be determined with the applicable modifications described in § 44-30-12 as if the accrued items were includible or allowable for federal income tax purposes.
(3) No item of income or deduction, which is accrued under this subsection, shall be taken into account in determining Rhode Island income or Rhode Island deductions for any subsequent taxable period.
(4) The accruals under this subsection shall not be required if the individual files with the tax administrator a bond or other security acceptable to the tax administrator, conditioned upon the inclusion of amounts accruable under this subsection in Rhode Island income for one or more subsequent taxable years as if the individual had not changed his or her resident status.
(d) Minimum Tax. Where two (2) returns are required under this section, the total of the taxes due thereon shall not be less than would be due if the Rhode Island incomes reportable on the two (2) returns were includible in one return.
(e) Prorations. Where two (2) returns are required under this section, the federal standard deduction and the federal personal exemptions shall be prorated, under regulations of the tax administrator, between the two (2) returns to reflect the portions of the entire taxable year during which the individual was a resident and a nonresident.
History of Section.
P.L. 1971, ch. 8, art. 1, § 1; P.L. 1971, ch. 204, art. 3, § 1.