Bill > HB1147

This bill modifies Hawaii's Earned Income Tax Credit (EITC) in several key ways. First, it clarifies that nonresident taxpayers must calculate their state EITC by multiplying the full credit amount by the ratio of their Hawaii adjusted gross income to their federal adjusted gross income, ensuring a proportional credit based on income earned in the state. The bill also expands the definition of "qualifying individual taxpayer" to explicitly include both residents and nonresidents who file a federal income tax return claiming the federal EITC and use the same filing status and dependents on their Hawaii tax return. Additionally, the bill eliminates the unlimited carryforward of nonrefundable earned income tax credits, specifically stating that credits claimed for the tax year beginning after December 31, 2021, cannot be used as a credit for tax years beginning after December 31, 2025. This change effectively limits the time period during which taxpayers can apply unused nonrefundable credits, potentially impacting taxpayers' future tax planning. The bill is set to take effect on July 1, 3000, and will apply to taxable years beginning after December 31, 2024.