Believing an S corp with no profit owes Rhode Island nothing. The $400 minimum corporate tax is due every year from every Rhode Island S corp regardless of income, activity, or losses, and it is the single most common surprise bill. The second gotcha is the 2025 PTE credit change: if you elect the pass-through entity tax, only 90% of what the entity pays comes back as an owner credit, so the election is now worth substantially less than it was and can produce a net Rhode Island cost if the federal SALT benefit is small.
Recognized automaticallyPTET available
S-corp election in Rhode Island
In short
$400 annual minimum corporate tax, owed by every Rhode Island S corp regardless of income or activity. Optional pass-through entity election tax at 5.99% is also available.
Does Rhode Island recognize the federal S election?
Rhode Island automatically recognizes your federal S election — there is no separate Rhode Island S-corp election. But do not mistake "pass-through" for "no return and no tax": a Rhode Island S corp must file Form RI-1120S every year and pay the $400 annual minimum corporate tax even with zero or negative income. Income above that flows through to shareholders on RI Schedule K-1.
Tax the entity still owes
MINIMUM TAX: "Rhode Island minimum tax is $400.00" — quoted verbatim from the FINAL 2025 RI-1120S instructions (posted by the RI Division of Taxation in January 2026; the earlier DRAFT 12/02/2025 watermark is gone from this version). Reported on Form RI-1120S, Line 7a. The minimum tax must be included for each entity in a combined/Q-sub filing. DUE DATE: the 15th day of the third month following the close of the taxable year — March 15 for calendar-year filers. PASS-THROUGH ENTITY ELECTION TAX: rate 5.99% (R.I. Gen. Laws § 44-11-2.3). CREDIT CHANGE — IMPORTANT: for tax years beginning on or after January 1, 2025 the owner-level credit for tax paid by an electing pass-through entity is calculated at NINETY PERCENT (90%) of the amount of tax paid by the entity at the entity level, and 90% is the maximum that can be passed through to owners on a pro rata basis. This is a reduction from the prior 100% credit regime. Reported via RI Schedule PTE and Form RI-1120S Line 7d. PASS-THROUGH WITHHOLDING: nonresident pass-through withholding is computed on RI Schedule PTW and reported on Form RI-1120S Line 7c (R.I. Gen. Laws § 44-11-2.2).
Registering for payroll
An S corp paying wages must register for Rhode Island income tax withholding with the RI Division of Taxation and for unemployment insurance and Temporary Disability Insurance (TDI) with the RI Department of Labor and Training (DLT). Rhode Island is one of the few states with an employee-paid TDI/TCI payroll tax. Direct the user to tax.ri.gov and dlt.ri.gov for current registration steps and rates.
Annual filings
Form RI-1120S, Rhode Island Business Corporation Tax Return — due the 15th day of the third month after the close of the taxable year (March 15 for calendar-year filers); includes the $400 minimum tax at Line 7a. RI Schedule K-1 issued to each shareholder. RI Schedule PTE if the pass-through entity election tax is being paid. RI Schedule PTW if nonresident pass-through withholding applies. Estimated payments may be required. SEPARATELY, an annual report is filed with the RI Secretary of State.
Pass-through entity tax
Yes — Rhode Island offers an elective pass-through entity tax at 5.99%. CRITICAL 2025 CHANGE that materially reduces the benefit: for tax years beginning on or after January 1, 2025, the owner-level state tax credit is only 90% of the entity-level tax paid (previously 100%). The RI Division of Taxation's own 'pass-through entities' web page still describes the pre-2025 100% regime and is badly out of date — rely on the RI-1120S instructions and RI Schedule PTE, not that page.
The mistake owners make most often in Rhode Island
Filing your federal Form 2553
Businesses operating in Rhode Island send Form 2553 to the IRS Kansas City service center — fax 855-887-7734. Full address and filing checklist for Rhode Island.
Frequently asked questions
Does Rhode Island require a separate S-corporation election?
No. Rhode Island does not require a separate state election. Rhode Island automatically recognizes your federal S election — there is no separate Rhode Island S-corp election. But do not mistake "pass-through" for "no return and no tax": a Rhode Island S corp must file Form RI-1120S every year and pay the $400 annual minimum corporate tax…
What tax does an S corporation pay in Rhode Island?
$400 annual minimum corporate tax, owed by every Rhode Island S corp regardless of income or activity. Optional pass-through entity election tax at 5.99% is also available.
Where do I file Form 2553 from Rhode Island?
With the IRS Kansas City service center. Fax 855-887-7734, or mail to Department of the Treasury, Internal Revenue Service, Kansas City, MO 64999.
What is the most common S-corp mistake in Rhode Island?
Believing an S corp with no profit owes Rhode Island nothing. The $400 minimum corporate tax is due every year from every Rhode Island S corp regardless of income, activity, or losses, and it is the single most common surprise bill. The second gotcha is the 2025 PTE credit change: if you elect the pass-through entity tax, only 90% of what the entity pays comes back as an owner credit, so the election is now worth substantially less than it was and can produce a net Rhode Island cost if the federal SALT benefit is small.
Compare with other states: South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont.
Sources
File your Form 2553 correctly
Scorply completes your federal election and includes a Rhode Island guide in your packet, so you know exactly what else you owe here.
Start my Form 2553Researched from official Rhode Island sources and verified July 30, 2026. State tax rules change. This is general information, not tax advice — confirm with the state or a CPA before you rely on it.