Bill > SB704

This bill permanently increases the state earned income tax credit (EITC) from 40% to 50% of the federal EITC, which is a tax benefit designed to provide financial support to low to moderate-income working individuals and families. The federal EITC, established under section 32 of the Internal Revenue Code, allows eligible taxpayers to claim a refundable tax credit based on their income and number of qualifying children. Under this bill, Hawaii taxpayers will now be able to claim a state EITC that is 50% of their federal EITC amount, instead of the previous 40%, providing increased financial assistance. The changes will apply to taxable years beginning after December 31, 2024, and the bill also includes a provision that these amendments will be repealed on December 31, 2027, reverting the EITC rate back to its previous level unless further legislative action is taken. By increasing the state EITC, the bill aims to provide additional support to working families and help offset the cost of living for lower-income households.

Budget and Finance

https://www.capitol.hawaii.gov/session/measure_indiv.aspx?billtype=SB&billnumber=704&year=2025