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6/30/2026
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Bill to ease tax reporting for businesses by aligning state with IRS practices becomes law
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STATE HOUSE — Legislation (2026-H 8604A, 2026-S 3367A) introduced by Rep. Mary Ann Shallcross Smith and Louis P. DiPalma to change Rhode Island tax law relating to the filing of a 1099 form to make it consistent with policies of the Internal Revenue Service has become law.
In February, the Division of Taxation clarified that it would require all filers with income more than $100 to file an informational 1099 form in accordance with state law. This dollar amount hasn’t changed since the law was enacted in 1971.
“This legislation brings Rhode Island into conformance with the IRS guidelines where 1099 wages need to be reported,” said Representative Shallcross Smith (D-Dist. 46, Lincoln, Pawtucket), who chairs the House Small Business Committee. “The bill would make clear that Rhode Island’s 1099 reporting threshold will change with the federal guidelines to ensure consistency. Currently, the federal threshold is $2,000. The current guidance creates a significant administrative burden that impacts nonprofits, businesses and state agencies running community programs, and adds significant cost to nonprofits, whose budgets have been reduced by federal funding cuts, by requiring extra work from accountants.”
Prior to this year, most people were under the impression that 1099s were only required if there were Rhode Island withholdings to be reported. Therefore, most people did not file Rhode Island 1099s at all.
“Obtaining a W-9 and filing 1099s for small payments creates an administrative burden on small nonprofit organizations,” said Senator DiPalma (D-Dist. 12, Middletown, Little Compton, Newport, Tiverton), who serves as chairman of the Senate Finance Committee. “Many nonprofits utilize small stipends to incentivize participation in programs or reimburse for program participation costs, like transportation and childcare. That forces these organizations to deal with more bureaucracy than they should.”
For more information, contact:
Daniel Trafford, Publicist
State House Room 20
Providence, RI 02903
(401)222-1922
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