Bill > HB1151

This bill modifies Hawaii's income tax withholding regulations for taxable years beginning after December 31, 2024. Specifically, the bill removes the previous maximum tax rate of eight percent that could be considered when calculating income tax withholding and eliminates the requirement that a standard deduction allowance be treated as a withholding exemption. Instead, the bill gives the Director of Taxation more flexibility to prescribe a standard deduction allowance that can be more or less than one whole exemption. The bill maintains the existing process of estimating an employee's annual wage for tax withholding purposes, which assumes the employee's current wage will be their sole income for the year and calculates potential tax liability based on various assumptions about deductions, exemptions, and potential joint filing status. These changes aim to provide more administrative discretion in determining tax withholding calculations while simplifying the existing withholding framework.

Budget and Finance

https://www.capitol.hawaii.gov/session/measure_indiv.aspx?billtype=HB&billnumber=1151&year=2026