Why There’s No Inheritance Tax in Rhode Island
There’s no inheritance tax in Rhode Island. Learn why that’s the case and what it means for state residents and property owners.
The inheritance tax in Rhode Island no longer exists. Today, the state uses an estate tax instead, applied to the value of an estate before assets go to beneficiaries. That means heirs don’t pay a separate state tax on what they receive.
Rhode Island once used a patchwork of “estate and transfer” levies. Over time, lawmakers repealed many transfer-style provisions and modernized the code under Chapter 44-22. Which left a stand-alone estate tax framework in place. You can see this evolution in the statute index, where multiple former sections are marked “repealed.”
A big shove came from federal changes. In 2001, Congress phased out the federal credit for state “pick-up” taxes. Many states, including Rhode Island, “decoupled” by adopting their own estate tax tied to the federal rules as they existed on January 1, 2001. Rhode Island’s law at §44-22-1.1 reflects that linkage and defines how the state estate tax works today. In short: the state chose an estate tax, not an inheritance tax.
Why the State Chose to Eliminate It
Ending the inheritance tax simplified compliance and aligned Rhode Island with the federal approach, which looks at the total estate rather than each heir’s share. It also avoided the complexity of different rates by relationship (a hallmark of inheritance systems) and made administration more predictable.
What No Inheritance Tax in Rhode Island Means for Families
If a Rhode Island resident passes, only the estate is evaluated for state tax. Beneficiaries don’t file a separate state inheritance return. The Division of Taxation updates the estate tax threshold annually for inflation—useful for tracking whether an estate is likely to owe. For 2025, the threshold is $1,802,431, adjusted via CPI-U.
(Learn More: Read about revocable trusts in Rhode Island versus Nevada.)