Bill > HB326

This bill modifies Hawaii's Household and Dependent Care Services Tax Credit by changing how the tax credit percentage is calculated for taxpayers. Specifically, the bill establishes a new method for determining the applicable percentage of employment-related expenses that can be claimed, starting at 50% and reducing by one percentage point for every $3,000 of adjusted gross income above a $150,000 threshold, with a minimum credit percentage of 25%. The bill introduces a new "cost-of-living adjustment factor" that will allow the income threshold to be adjusted annually based on changes in the Consumer Price Index. The tax credit can be used for expenses related to child care or care for dependents who are unable to care for themselves, helping working families offset the costs of dependent care. The legislation is designed to provide more financial relief to families by increasing the potential tax credit amount, addressing the legislature's finding that the average cost of full-time child care in Hawaii exceeds $13,000 per year. The bill will apply to taxable years beginning after December 31, 2024, and will automatically be repealed on June 30, 2030, reverting the law to its previous form.