THE SENATE

S.B. NO.

1445

THIRTY-SECOND LEGISLATURE, 2023

 

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 235-55.6, Hawaii Revised Statutes, is amended as follows:

     1.  By amending subsection (a) to read:

     "(a)  Allowance of credit.

     (1)  In general.  For each resident taxpayer, who files an individual income tax return for a taxable year, and who is not claimed or is not otherwise eligible to be claimed as a dependent by another taxpayer for federal or Hawaii state individual income tax purposes, who maintains a household [which] that includes as a member one or more qualifying individuals (as defined in subsection (b)(1)), there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the applicable percentage of the employment-related expenses (as defined in subsection (b)(2)) paid by the individual during the taxable year.  If the tax credit claimed by a resident taxpayer exceeds the amount of income tax payment due from the resident taxpayer, the excess of the credit over payments due shall be refunded to the resident taxpayer; provided that tax credit properly claimed by a resident individual who has no income tax liability shall be paid to the resident individual; and provided further that no refunds or payment on account of the tax credit allowed by this section shall be made for amounts less than $1.

     (2)  Applicable percentage.  For purposes of paragraph (1), the taxpayer's applicable percentage shall be determined as follows:

          Adjusted gross income         Applicable percentage

            [Not over $25,000                   25%

            Over $25,000 but                   24%

              not over $30,000

            Over $30,000 but                   23%

              not over $35,000

            Over $35,000 but                   22%

              not over $40,000

            Over $40,000 but                   21%

              not over $45,000

            Over $45,000 but                   20%

              not over $50,000

            Over $50,000                       15%.]

            Not over $15,000                   35%

            Over $15,000 but                   34%

            not over $17,000

            Over $17,000 but                   33%

            not over $19,000

            Over $19,000 but                   32%

            not over $21,000

            Over $21,000 but                   31%

            not over $23,000

            Over $23,000 but                   30%

            not over $25,000

            Over $25,000 but                   29%

            not over $27,000

            Over $27,000 but                   28%

            not over $29,000

            Over $29,000 but                   27%

            not over $31,000

            Over $31,000 but                   26%

            not over $33,000

            Over $33,000 but                   25%

            not over $35,000

            Over $35,000 but                   24%

            not over $37,000

            Over $37,000 but                   23%

            not over $39,000

            Over $39,000 but                   22%

            not over $41,000

            Over $41,000 but                   21%

            not over $43,000

            Over $43,000                       20%."

     2.  By amending subsection (c) to read:

     "(c)  Dollar limit on amount creditable.  The amount of the employment-related expenses incurred during any taxable year, which may be taken into account under subsection (a) shall not exceed:

     (1)  [$2,400] $3,000 if there is one qualifying individual with respect to the taxpayer for such taxable year, or

     (2)  [$4,800] $6,000 if there are two or more qualifying individuals with respect to the taxpayer for such taxable year.

The amount determined under paragraph (1) or (2) (whichever is applicable) shall be reduced by the aggregate amount excludable from gross income under section 129 (with respect to dependent care assistance programs) of the Internal Revenue Code for the taxable year."

     SECTION 2.  Section 235-55.7, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:

     "(c)  Each taxpayer with an adjusted gross income of less than $30,000 who has paid more than $1,000 in rent during the taxable year for which the credit is claimed may claim a tax credit of [$50] $100 multiplied by the number of qualified exemptions to which the taxpayer is entitled; provided that each taxpayer sixty-five years of age or over may claim double the tax credit; [and] provided further that a resident individual who has no income or no income taxable under this chapter may also claim the tax credit as set forth in this section."

     SECTION 3.  Section 235-55.85, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

     "(b)  Each individual taxpayer may claim a refundable food/excise tax credit multiplied by the number of qualified exemptions to which the taxpayer is entitled in accordance with the table below; provided 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] $220

     $5,000 under $10,000              [$100] $200

     $10,000 under $15,000             [$ 85] $170

     $15,000 under $20,000             [$ 70] $140

     $20,000 under $30,000             [$ 55] $110

     $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] $220

     $5,000 under $10,000              [$100] $200

     $10,000 under $15,000             [$ 85] $170

     $15,000 under $20,000             [$ 70] $140

     $20,000 under $30,000             [$ 55] $110

     $30,000 under $40,000             [$ 45] $ 90

     $40,000 under $50,000             [$ 35] $ 70

     $50,000 and over                    $  0."

     SECTION 4.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 5.  This Act, upon its approval, shall apply to taxable years beginning after December 31, 2022.

 

INTRODUCED BY:

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Report Title:

Income Tax Credits; Household and Dependent Care; Expenses; Low-Income Household Renters; Refundable Food/Excise Tax; Increases

 

Description:

Conforms the amount allowable for the Hawaii expenses for household and dependent care services necessary for gainful employment tax credit to the credit amounts allowed in the federal tax code.  Increases the low-income household renters' income tax credit and refundable food/excise tax credit.  Applies to taxable years beginning after 12/31/2022.

 

 

 

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