Pensions Hawaii does not tax qualifying distributions from an employer-funded pension plan. If you received qualifying distributions from an employer-funded profit sharing, defined contribution, or defined benefit plan, or from a government retirement system (e.g., federal civil service, military pension, state or county retirement system), enter the qualifying amount.
Social Security Benefits Hawaii does not tax Social Security or first tier Railroad Retirement Act benefits.
Military Reserve or Hawaii National Guard Duty Pay Exclusion Hawaii does not tax the first $6,564 received by each member of the reserve components of the army, navy, air force, marine corps, coast guard of the United States of America, and the Hawaii national guard, as compensation for performance of duty as such.
If you qualify, enter the smaller of:
• $6,564, or
• Your pay, as shown on Box 16 of the Form W-2 sent to you by your reserve component.
If you are married filing a joint return, and you and your spouse qualify, add the exclusions for both of you and enter the total.
Payments to an Individual Housing Account You may be able to deduct from your gross income up to $5,000 paid in cash during the taxable year into a trust account which is established for saving for a down payment on your first principal residence. A deduction not to exceed $10,000 shall be allowed for a married couple filing a joint return. No deduction shall be allowed on any amounts distributed less than 365 days from the date on which a contribution is made to the account. Any deduction claimed for a previous taxable year for amounts distributed less than 365 days from the date on which a contribution was made shall be disallowed and the amount deducted shall be included in the previous taxable year’s gross income and the tax reassessed. The account is to encourage first-time home buyers to save money for a down payment on a home.
Exceptional Trees Deduction You may deduct up to $3,000 per exceptional tree for qualified expenditures you made during the taxable year to maintain the tree on your private property. The tree must be designated as an exceptional tree by the local county arborist advisory committee under chapter 58, Hawaii Revised Statutes (HRS). Qualified expenditures are those expenses you incurred to maintain the exceptional tree (excluding interest) that are deemed “reasonably necessary” by a certified arborist. No deduction is allowed in more than one taxable year out of every three consecutive taxable years.
Other items that are taxed by the federal government but are not taxed by Hawaii, such as: • Interest on federal obligations, including U.S. Savings Bonds. • Differences in the taxable portion of the Hawaii tax refund. • Interest earned on an Individual Housing Account. • Compensation earned by patients with Hansen’s disease. • Expenses not allowed on your federal return because they were connected with federal credits. • Unearned income of children that you included in your federal return, if the children are filing Hawaii returns. • Benefits from or premiums paid to legal services plans. • Differences in the deduction for student loan interest. • Differences in the taxable portion of employer-provided adoption benefits. • Certain income from a qualified high technology business. • Contributions to and interest earned by an individual development account. • Moving expenses. • Qualified bicycle commuting reimbursement. • Undistributed income earned by certain foreign corporations. • Other adjustments.