Updated October 5, 2026. Quick answer: Yes. Rhode Island income starts from “adjusted gross income for federal income tax purposes, with the modifications” in the statute, so interest and dividends are taxed at 3.75%, 4.75% or 5.99% for 2025. Interest on U.S. obligations is subtracted, and interest on other states’ bonds is added back.
How Rhode Island treats dividends and interest
| Item | What the documents say |
|---|---|
| Treatment | Taxed on the graduated schedule |
| 2025 rates | 3.75% up to $79,900 of taxable income, 4.75% from $79,900 to $181,650 and 5.99% above $181,650, for all filing statuses |
| Other states’ bonds | The statute adds back “Interest income on obligations of any state, or its political subdivisions” other than Rhode Island; the instructions say the same on Schedule M: “municipal bond interest from a state other than Rhode Island” |
| Rhode Island bonds | The add-back reaches only non-Rhode Island obligations, and the statute prints no separate subtraction for Rhode Island bonds |
| U.S. obligations | Subtracted: “Any interest income on obligations of the United States and its possessions”, for example a “US Government Series E bond” |
| Mutual funds | The documents print no separate pass-through rule |
A $20,000 example
Taxable dividends and interest of $20,000 taxed wholly at 3.75% would add $20,000 x 3.75% = $750; taxed wholly at the top rate, 5.99%, $1,198. Your total taxable income decides the bracket.
What changes in 2026
The archived documents print the 2025 schedule and no 2026 change to the way dividends and interest are taxed.
Federal rules
The state’s treatment sits on top of the federal one. Qualified dividends and ordinary dividends are sorted out on the Form 1099-DIV, as the site explains in Box 1a and 1b: ordinary versus qualified dividends, and interest is reported as covered in 1099-INT Box 1. The IRS explains the federal side in Topic no. 403, Interest Received and Topic no. 404, Dividends.
Related: whether Rhode Island taxes capital gains, whether Rhode Island taxes pensions, how Rhode Island taxes retirement income, dividends and interest tax by state, and how tax-exempt interest is reported.
Find the right next step for your situation
About how much do you have invested? Pick the range that fits; your next step appears immediately below.
Compare vetted advisors for your investments
If your portfolio is $250,000 or more, this connects you (free, with no obligation to hire anyone) with 2 to 3 vetted advisors.
Before you start, what actually happens. The matching service is run by WiserAdvisor, an independent advisor-matching company. It opens on their site, asks for your ZIP code and a few questions, and matches you with 2 to 3 vetted advisors. It is free to you.
WiserAdvisor states the service is built for portfolios of $250,000 and above. By submitting, you consent to emails, phone calls and text messages from WiserAdvisor and up to three advisors, so expect to be contacted. Clear Money Guide may earn a referral payment for a qualifying completed form, whether or not you ever hire anyone.
Opens on WiserAdvisor’s site in a new tab.
See how an advisor weighs your portfolio
Price the destination before you decide. The matching service below introduces you to advisers who pay to meet you.
Before you start, what actually happens. The form is run by Kapitalwise, our advisor-matching partner. Kapitalwise sends your details to advisers who pay for the introduction, so expect calls and texts. Clear Money Guide may earn a referral payment through this service, whether or not you ever hire anyone. This is free to you and there is no obligation to hire anyone.
The Kapitalwise form opens here; you stay on this page.
What happens when you press the button
It asks about nine questions: age, investable assets, location; then your name, email and phone number, and verifies the phone by text. Nothing loads and nothing reaches Kapitalwise until you press the button.
Prefer flat-fee or hourly pricing instead? Compare ranges here.
Answer againSources
- 2025 Rhode Island Tax Rate Schedule: https://tax.ri.gov/sites/g/files/xkgbur541/files/2025-10/2025 RI Tax Tables_Full_d.pdf
- R.I. Gen. Laws 44-30-12 Rhode Island income of a resident individual: http://webserver.rilegislature.gov/Statutes/TITLE44/44-30/44-II/44-30-12.htm
- 2025 RI-1040 Forms and Instructions: https://tax.ri.gov/sites/g/files/xkgbur541/files/2025-11/2025 1040R Instructions_d.pdf
Sources: the primary documents linked above, read on October 5, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the plan administrator or the agency itself is the right place to confirm anything consequential.