THE SENATE

S.B. NO.

1264

THIRTY-FIRST LEGISLATURE, 2021

 

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

RELATING TO TAXATION.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 

     SECTION 1.  Section 235-55.85, Hawaii Revised Statutes, is amended as follows:

     1.   By amending subsection (b) to read:

     "(b)  Each individual taxpayer with Hawaii earned income of at least $1 but less than $30,000 and a federal adjusted gross income of less than $30,000 may claim a refundable food/excise tax credit of $150 multiplied by the number of qualified exemptions to which the taxpayer is entitled [in accordance with the table below]; provided that taxpayers with a filing status of head of household, married filing separate, and married filing jointly, may claim the credit if the taxpayer has Hawaii earned income of at least $1 but less than $50,000 and federal adjusted gross income of less than $50,000; provided further that a husband and wife filing separate tax returns for a taxable year for which a joint return could have been filed by them shall claim only the tax credit to which they would have been entitled had a joint return been filed.

     [Adjusted gross income        Credit per exemption

     for taxpayers filing

     a single return

     Under $5,000                         $110

     $5,000 under $10,000                 $100

     $10,000 under $15,000                $ 85

     $15,000 under $20,000                $ 70

     $20,000 under $30,000                $ 55

     $30,000 and over                      $  0.

     Adjusted gross income         Credit per exemption

     for heads of household,

     married individuals filing

     separate returns, and

     married couples filing

     joint returns

     Under $5,000                         $110

     $5,000 under $10,000                 $100

     $10,000 under $15,000                $ 85

     $15,000 under $20,000                $ 70

     $20,000 under $30,000                $ 55

     $30,000 under $40,000                $ 45

     $40,000 under $50,000                $ 35

     $50,000 and over                  $  0.]"

     2.  By amending subsection (g) to read:

     "(g)  For the purposes of this section[, "adjusted gross income" means adjusted gross income as defined by the Internal Revenue Code.]:

     (1)  "Hawaii earned income" means:

          (A)  Wages, salaries, tips, and other employee compensation that is subject to the taxes imposed by this chapter, but only if these amounts are includible in gross income for the taxable year; and

          (B)  The amount of the taxpayer's net earnings from self-employment that is subject to the taxes imposed by this chapter for the taxable year (within the meaning of section 1402(a) of the Internal Revenue Code); provided that the net earnings shall be determined with regard to the deduction allowed to the taxpayer by section 164(f) of the Internal Revenue Code; and

     (2)  For purposes of paragraph (1):

          (A)  The Hawaii earned income of an individual shall be computed without regard to any community property laws;

          (B)  No amount received as a pension or annuity shall be taken into account;

          (C)  No amount to which section 871(a) of the Internal Revenue Code applies (relating to income of nonresident alien individuals not connected with United States business) shall be taken into account;

          (D)  No amount received for services provided by an individual while the individual is an inmate at a penal institution shall be taken into account;

          (E)  No amount described in paragraph (1) received for service performed in work activities as defined in paragraph (4) or (7) of section 407(d) of the Social Security Act to which the taxpayer is assigned under any state program under part A of title IV of the Social Security Act shall be taken into account, but only to the extent the amount is subsidized under the state program; and

          (F)  A taxpayer may elect to treat amounts excluded from gross income by reason of section 112 of the Internal Revenue Code as Hawaii earned income."

     SECTION 2.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 3.  This Act, upon its approval; provided that section 1 shall apply to taxable years beginning after December 31, 2020.

 

INTRODUCED BY:

_____________________________

 

 

 

 

Report Title:

Income Tax; Refundable Food/Excise Tax Credit

 

Description:

Increases and amends the refundable food/excise tax credit by basing the amount of the credit on a taxpayer's Hawaii earned income and federal adjusted gross income.

 

 

 

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.