Rhode Island
RI offers state workers with botched W-2s reimbursement for tax filings
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- Rhode Island is offering state employees up to $200 in reimbursement for costs related to refiling their taxes.
- The reimbursement follows a series of payroll glitches and botched W-2 forms caused by a new state accounting system.
- Problems with the new system included underpayments, overpayments, and incorrect employer information on tax documents.
The McKee administration is offering up to $200 to any state employee who incurred any additional expense in filing, and then having to refile, their taxes because of a series of botched paychecks and W-2s.
How did we get here? On April 15, also known as Tax Day, Patrick Crowley, the president of the Rhode Island AFL-CIO, called on the McKee administration to reimburse public service workers who had to refile their taxes because of a series of several payroll glitches.
On May 4, Thomas Verdi, the acting director of the Department of Administration, sent state workers a “Dear Colleagues” email that said:
“We recognize that the W-2 corrections released by the state may have resulted in additional tax preparation costs for individuals who had to amend their tax returns.
“To assist with this expense, the state will provide a one-time reimbursement for up to $200 for tax preparation and filing costs an employee incurred to amend a federal and/or state tax return directly related to the W-2Cs issued by the State of Rhode Island.”
The latest in a litany of financial issues with state’s payroll system
The Department of Administration has not yet responded to Journal inquiries about the projected cost to the state.
But the list of well-publicized problems goes on and on.
They have included underpayments, overpayments, botched W-2s that misidentified their employer as the “Rhode Island Umbrella Company,” and a problem with Health Savings Account contributions where the employer and employee contributions were reported separately, instead of combined and will require new W-2Cs to go out to impacted employees. according to Department of Administration spokeswoman Karen Greco.
And about $220,000 in union dues inadvertently wound up in employee paychecks instead of being withheld from them.
Most, though not all, of the glitches were attributed to problems with the state’s buggy new $99 million finance and accounting system known as Enterprise Resource Planning, or ERP, which launched in late 2025.
A Department of Administration spokeswoman told The Journal on April 15 that “significant progress has been made to ensure employees who required paycheck corrections are made whole,” but Crowley said his members “shouldn’t pay for mistakes they didn’t make.”
“That is why we are calling on the state of Rhode Island to reimburse state workers who have incurred expenses for refiling their taxes or may have to do so before problems are corrected.”
Olivia DaRocha, a spokeswoman for Gov. Dan McKee, said at that time that the administration was looking at potential ways to support impacted employees.
The email from Verdi to state workers included an “affidavit” for state workers to sign to verify how much, if anything, additional they had to pay to amend their tax returns.