On March 19, 2026, a majority of the Rhode Island Supreme Court quashed a decision of the District Court which granted the taxpayers, Robert and Mary Schmidt, a refund of their over paid 2017 personal income taxes. The taxpayers filed their 2017 Rhode Island personal income tax return claiming a refund on or about July 14, 2020. The refund claim was within the three year time limit to file a claim for refund under Rhode Island law, however, the claim was made two years and three months after the taxpayers’ Rhode Island income tax withholding payments were deemed paid. The majority ruled that Rhode Island’s refund statute, R.I.G.L. Section § 44-30-87, must be read to deny the taxpayer’s claim because the overpaid taxes were not paid within three years from the filing on the tax return. The majority found that the language of R.I.G.L. Section § 44-30-87 was clear and that the legislature intended the three year period to file a claim for refund to be forward looking instead of including the three-year period of time immediately preceding the filing of the claim.

Thomas P. Quinn, Esq., Managing Partner, who argued the case for the taxpayers said, “We thank the Rhode Island Supreme Court for its consideration of the taxpayers’ appeal, and we join Justice Robinson in his dissent and are likewise astonished that a majority of the Rhode Island Supreme Court decided that the legislature intended the result in this case.” He also said, “We thank Bob and Mary Schmidt for their efforts to prosecute their refund denial appeal because according to Bob, ‘This just isn’t right.’” We agree.

The majority decision noted the valid policy considerations raised in the taxpayers’ arguments but left those considerations for the Legislature to fix. Rhode Island taxpayers and their professionals are reminded that the Rhode Island refund statute of limitation remains a trap for the unwary and it does not follow the federal three-year refund statute. Claims for refund of Rhode Island withholding and estimated tax payments must be filed within two-years of the date of deemed payment or the claims will be denied.

For questions about the Rhode Island Supreme Court decision or assistance with any tax, business or bankruptcy matters, please contact McLaughlinQuinn LLC.