A Rundown of the Rhode Island Estate Tax
Understand the Rhode Island estate tax, exemptions, and what it all means for residents and property owners in the state.
The Rhode Island estate tax affects estates over a set threshold, updated annually for inflation. The state’s framework also includes a tax credit that effectively shelters a portion of an estate. Lawmakers set a base credit in 2014. Since then, the Division of Taxation has published yearly adjustments and historical thresholds.
Before the early 2000s, most states used a “pick-up” system. States took a share of the federal estate tax via a credit, so paying state tax didn’t increase the overall bill. Congress phased out that federal credit in the 2001 EGTRRA law, which pushed states to create stand-alone systems. Rhode Island is one of the states that did so, and today it imposes its own separate Rhode Island estate tax with its own threshold and rules (although no inheritance tax).
For decedents who pass in 2025, the Division of Taxation set the credit at $85,375, which exempts the first $1,802,431 of value. That’s up from $1,774,583 for 2024. In plain terms: if an estate’s net taxable amount is at or below $1,802,431, the Rhode Island estate tax doesn’t apply. Over the threshold, Rhode Island uses a bracketed schedule with rates that top out at 16%.
How the Rhode Island Estate Tax Annual Inflation Adjustment Works
A defining feature of the tax is its built-in inflation indexing. By statute and guidance, the state adjusts the credit each year by the percentage change in the CPI-U (Consumer Price Index for All Urban Consumers). That CPI-U link is why the 2025 threshold nudged higher. Each December, the Division of Taxation releases the next year’s figures.
Indexing reduces “bracket creep.” Asset values and real estate can rise with inflation. Without indexing, more modest estates could cross the line over time. With indexing, the Rhode Island estate tax threshold moves to reflect price levels. This helps keep the tax focused on larger estates. (For context, the state also publishes multi-year threshold tables, which show the steady climb since 2014.)
What the Rhode Island Estate Tax Means for Residents
If you’re a Rhode Island resident, your worldwide assets count toward the threshold. Think real estate, financial accounts, business interests, and personal property. Only the value above the threshold is taxed, after allowable deductions.
Many residents use simple tactics to stay organized—retitling assets, keeping beneficiary designations current, and making sure an inventory includes both financial and sentimental items. You don’t need to be ultra-wealthy to benefit from clarity. It keeps surprises to a minimum for the people you care about.
What It Means If You Own Property in Rhode Island
Nonresidents can also encounter the Rhode Island estate tax. If you own real property or tangible personal property located in Rhode Island, that in-state property can be subject to the tax, even if you live elsewhere. Estates that include out-of-state and in-state assets typically apportion the liability based on the share located in the state. Check the latest Division of Taxation guidance when valuing in-state holdings.
(Learn More: Read about revocable trusts in Rhode Island versus Nevada.)