Hawaii — Personal Income Tax

Hawaii imposes personal income tax on residents and nonresidents under different sourcing rules. Residents are taxed on their entire income, regardless of where it is earned—both Hawaii-source and out-of-state income are included in the tax base. Nonresidents, in contrast, are taxed only on income derived from Hawaii sources, including income from property owned in Hawaii, personal services performed in the state, trade or business carried on in Hawaii, and any other source within the state. A special rule applies when a nonresident files a joint return with a resident spouse: the nonresident's entire income (both Hawaii-source and out-of-state) becomes taxable.

Source: HRS § 235-4

Hawaii imposes graduated personal income tax rates on taxable income, with separate rate schedules for married taxpayers filing jointly and surviving spouses, heads of household, single filers, and married individuals filing separately. The statute also provides separate rates for estates and trusts. The rate structure has been amended multiple times, most recently by Act 46 of 2024, effective for taxable years beginning after December 31, 2023.

Source: HRS § 235-51

Act 46, Session Laws of Hawaii 2024, amended the personal income tax rate schedules in HRS § 235-51. The 2024 amendments apply to taxable years beginning after December 31, 2023. The Act amended subsections (a), (b), and (c) of section 235-51, which establish the tax rate tables for joint filers, heads of household, and single/married filing separately filers, respectively.

Source: HRS § 235-51, legislative notes

Hawaii imposes personal income tax using twelve graduated marginal rates ranging from 1.4% (lowest bracket) to 11% (highest bracket). HRS § 235-51 establishes separate rate schedules for married taxpayers filing jointly and surviving spouses, heads of household, single filers, and married individuals filing separately, with each schedule containing the same twelve rates applied at different income thresholds. The twelve-bracket structure and income thresholds were last amended by Act 46, Session Laws of Hawaii 2024, effective for taxable years beginning after December 31, 2023.

Source: HRS § 235-51

Hawaii individual income tax returns for calendar-year taxpayers must be filed by April 20, which differs from the federal April 15 deadline. For fiscal-year filers, returns are due on or before the twentieth day of the fourth month following the close of the taxable year. This deadline applies to residents filing Form N-11 and nonresidents or part-year residents filing Form N-15.

Source: HRS § 235-97(b)

Hawaii defines "resident" through a two-prong statutory test: an individual qualifies as a resident either by being domiciled in Hawaii or by residing in the state for other than a temporary or transitory purpose. Domicile is the place of an individual's true, fixed, permanent home and principal establishment, to which the individual intends to return when absent. An individual can have multiple residences but only one domicile at a time. Domicile changes when three concurrent elements align: (1) abandonment of the old domicile with specific intent to abandon, (2) intent to acquire a specific new domicile, and (3) actual physical presence in the new domicile.

An individual not domiciled in Hawaii may nevertheless acquire resident status under the second prong by being physically present in Hawaii for other than a temporary or transitory purpose. Whether a purpose is temporary or transitory depends on the facts and circumstances of each case. Hawaii Administrative Rules provide illustrative factors: an individual is deemed a resident if present in Hawaii (a) for business purposes requiring a long or indefinite period to accomplish, (b) employed in a position that may last permanently or indefinitely, or (c) retired and moved to Hawaii with no definite intention of leaving. Conversely, an individual is deemed a nonresident if in Hawaii (a) simply passing through to another state or country, (b) for a brief rest or vacation, (c) for health reasons receiving medical treatment or recuperating from an illness, or (d) for a short period to complete a particular transaction or perform a particular contract.

200-day presumption of residency (rebuttable). Hawaii imposes a statutory presumption: every individual who is in the state more than 200 days of the taxable year in the aggregate (not necessarily consecutive) is presumed to be a resident from the time of arrival. The 200-day threshold counts all days of physical presence during the tax year. This is a presumption of residency, not a safe harbor from residency. The presumption may be overcome by evidence satisfactory to the Hawaii Department of Taxation that the individual (1) maintains a permanent place of abode outside of Hawaii and (2) is in Hawaii for a temporary or transitory purpose. The burden of rebuttal rests on the taxpayer.

Critically, an individual can be a Hawaii resident with fewer than 200 days of presence if the individual either (a) is domiciled in Hawaii, or (b) resides in Hawaii for other than a temporary or transitory purpose under the facts-and-circumstances test. The 200-day rule does not create a safe harbor threshold below which non-resident status is guaranteed; it creates a presumption above which resident status is presumed.

Military and special exclusions. No person is deemed to have gained or lost a Hawaii residence simply because of presence or absence in compliance with military or naval orders of the United States, while engaged in aviation or navigation, or while a student at any institution of learning.

Dual residency. Because each state defines "resident" differently, it is possible for an individual to be considered a resident of more than one state simultaneously. Hawaii's definition does not preclude dual residency; in such cases, the individual may be subject to Hawaii income tax on worldwide income while also subject to another state's taxation as a resident, with relief available through the tax credit for taxes paid to other jurisdictions under HRS § 235-55.

"Nonresident" means every individual other than a resident.

Source: HRS § 235-1 Source: Haw. Admin. Rules § 18-235-1.07 Source: Tax Information Release No. 97-1

Hawaii taxes individuals who change residence status during the taxable year—either moving into or out of the state mid-year—under a dual-period allocation framework. These part-year residents are subject to two distinct tax regimes within a single year, with income allocated between the period of residence and the period of nonresidence.

Dual-period taxation rules

For the period of residence, Hawaii imposes tax on income from whatever source derived, both Hawaii-source and out-of-state income. For the period of nonresidence, Hawaii imposes tax only on Hawaii-source income. The allocation follows the calendar-year or fiscal-year structure; income must be assigned to the appropriate period based on when it was generated or received.

Income allocation methodology

When it can be determined whether income was generated during the period of residence or nonresidence, the income is allocated directly to that period. For example, wages earned after the move-in date are allocated to the period of residence, while gain from the sale of out-of-state real property sold before the move-in date is allocated to the period of nonresidence and excluded from Hawaii taxation.

If it cannot be determined whether all or part of a taxpayer's income was generated during the period of residence, that amount of income is multiplied by the ratio that the period of residence bears to the entire taxable year. The product is the portion attributable to Hawaii, unless the taxpayer demonstrates to the satisfaction of the Hawaii Department of Taxation that the result incorrectly attributes to Hawaii out-of-state income that was received or derived during the period of nonresidence. The burden of proof rests on the taxpayer.

Illustration from the regulation

The regulation provides a detailed example: An unmarried cash-basis calendar-year taxpayer (T) was a resident of Arizona on January 1, 1993, moved to Hawaii on April 1, 1993, and remained a Hawaii resident for the remainder of 1993. T received $20,000 as gain from the sale on March 20, 1993, of Arizona real property held for investment. Because this gain was received when T was a nonresident and is out-of-state income, it is not subject to Hawaii tax. T earned commissions of $25,000 for policies sold after April 1, 1993, which are fully attributable to the period of residence. T earned initial and renewal commissions of $12,000 for policies sold before April 1, $4,000 of which T earned before April 1. The $8,000 balance is allocable to the period of residence. T also had a business consulting contract with an Arizona client, for which T was paid $1,200 for services rendered throughout the year. Because T was a resident for nine months in 1993, 9/12 × $1,200, or $900, is attributable to Hawaii unless T demonstrates otherwise to the satisfaction of the department.

Joint-return special rules

If a part-year resident files a joint return with a spouse who is a resident for the full taxable year, the tax is imposed on aggregate income for the full taxable year without regard to source and without regard to either spouse's period of residence. If a joint return is filed by two individuals neither of whom is a resident for the full taxable year, the tax is imposed on aggregate income without regard to source for the period in which either spouse was a resident. By filing a joint return, a nonresident spouse does not become a resident, and a part-year resident spouse does not thereby become a resident for any other part of the year, for purposes of Hawaii income tax law.

Deductions for part-year residents

Deductions are allocated between those connected with income allocable to the period of residence and those connected with income allocable to the period of nonresidence. Deductions are allocated in the same ratio as the connected income, unless the taxpayer demonstrates to the satisfaction of the Department of Taxation that the result materially distorts Hawaii income.

Credit for taxes paid to other states

The credit for tax paid to another state under HRS § 235-55 is allowed only for tax paid on out-of-state income allocable to the period of residence. Part-year residents are not eligible for the 0.5% gross sales election available to certain small nonresident taxpayers under Haw. Admin. Rules § 18-235-4-03(c).

Source: HRS § 235-4(c) Source: Haw. Admin. Rules § 18-235-4-04 Source: Haw. Admin. Rules § 18-235-5-03

Hawaii grants an automatic six-month extension to file individual income tax returns (Forms N-11 or N-15) without requiring submission of an extension application form. For calendar-year filers, the extension moves the filing deadline from April 20 to October 20. For fiscal-year filers, the extended deadline is the twentieth day of the tenth month following the close of the taxable year.

Conditions for automatic extension

The automatic extension is granted if all of the following conditions are satisfied:

1. Payment of properly estimated tax liability. The taxpayer must pay the properly estimated tax liability on or before the original April 20 deadline (or the twentieth day of the fourth month for fiscal-year filers). "Properly estimated tax liability" means the taxpayer has made a bona fide and reasonable attempt to locate and gather all necessary information to make a proper estimate of tax liability as of the original due date. The Hawaii Department of Taxation recommends that taxpayers consider the amount of tax owed in prior years when estimating the current year's liability and suggests overestimating to avoid penalties and interest.

1. Timely filing within the extension period. The taxpayer must file the tax return on or before the extended deadline (October 20 for calendar-year filers).

1. Full payment with return. The return when filed must be accompanied by payment of any Hawaii tax not already paid.

1. No court order. The taxpayer must not be bound by a court order to file the tax return on or before the original prescribed due date.

If all four conditions are not met, the automatic extension is deemed invalid and penalties and interest are assessed on any amount owed as if no extension had been granted—computation of penalties and interest relates back to the original April 20 due date.

Extension applies to filing only, not payment

The automatic six-month extension provides additional time to file the return but does not extend the time for payment of any tax due. Interest under HRS § 231-39(b)(4) is assessed on any amount of tax not paid on or before the original prescribed due date (April 20 for calendar-year filers), even if the return is timely filed under the extension.

No application form required

Taxpayers need not file an extension application form to request the automatic extension. However, if the taxpayer makes a payment of tax by the original deadline to satisfy the properly-estimated-tax-liability condition, the payment must be submitted with the form prescribed by the department.

Federal extension forms not accepted

Hawaii does not accept federal extension forms (such as IRS Form 4868) in lieu of satisfying Hawaii's automatic extension conditions. The Hawaii-specific requirements must be met independently.

Source: HRS § 235-97(b) Source: Haw. Admin. Rules § 18-235-98 Source: Tax Year Information – 2025, Hawaii Department of Taxation

Hawaii requires an individual to file a personal income tax return when the individual's gross income exceeds the sum of the individual's allowable personal exemptions and standard deduction. This two-component threshold applies separately to residents and nonresidents based on their respective income bases—worldwide income for residents, Hawaii-source income for nonresidents.

Filing requirement statutory framework

HRS § 235-92(3) imposes a filing requirement on "[e]very individual, estate, or trust having for the taxable year gross income subject to taxation under this chapter, except as exempted from the filing of a return by regulations of the department." The statute authorizes the Hawaii Department of Taxation to excuse the filing of a return "where the gross income and exemptions are such that no tax is expected to accrue under this chapter." Haw. Admin. Rules § 18-235-92(a)(1)(B) implements this by specifying that "[e]very individual receiving gross income in excess of the total amount of any personal exemptions which the taxpayer may claim and the standard deduction" must file a return.

Personal exemption amount

HRS § 235-54(a) sets the personal exemption amount at $1,144 per exemption for all taxable years beginning after December 31, 1984. The number of exemptions is determined under the Internal Revenue Code, with one additional exemption allowed for a taxpayer or spouse who is sixty-five years of age or older within the taxable year. Under HRS § 235-54(c), a blind, deaf, or totally disabled individual receives a special exemption of $7,000 in lieu of the standard personal exemption.

Standard deduction amounts

Standard deduction amounts have been substantially increased by Act 46, Session Laws of Hawaii 2024, with a multi-year phase-in schedule. For tax year 2024 (taxable years beginning after December 31, 2023), the standard deduction amounts under HRS § 235-2.4(a)(2) are:

• Married filing jointly / surviving spouse: $4,400
• Head of household: $3,212
• Single filers: $2,200
• Married filing separately: $2,200

Act 46 increases these amounts progressively in tax years 2026, 2028, 2030, and 2031, ultimately reaching $24,000 for married filing jointly and $12,000 for single filers by tax year 2031.

Computing the filing threshold

The filing threshold for a given taxpayer is computed by summing (1) the personal exemption amount (number of exemptions multiplied by $1,144, or $7,000 for blind, deaf, or totally disabled individuals) and (2) the applicable standard deduction. For example, for tax year 2024, a single filer under age 65 with one exemption has a filing threshold of $3,344 ($1,144 personal exemption + $2,200 standard deduction). A married couple filing jointly, both under age 65, with two exemptions, has a filing threshold of $6,688 ($2,288 in personal exemptions + $4,400 standard deduction).

Application to nonresidents

Nonresidents compare only their Hawaii-source gross income to the threshold; however, nonresidents must prorate both their personal exemptions and standard deduction. HRS § 235-54(a) provides that "[a] nonresident shall prorate the personal exemptions on account of income from sources outside the State as provided in section 235-5." HRS § 235-5(d) requires that "[t]he standard deduction as provided in section 235-2.4 and personal exemptions as provided in section 235-54 shall be allowed only to the extent of the ratio of the adjusted gross income attributed to this State to the entire adjusted gross income computed without regard to source in the State." This proration prevents nonresidents from claiming the full threshold amount when only a portion of their income is subject to Hawaii taxation.

Special categories requiring filing regardless of income threshold

HRS § 235-92(1) requires "[e]very person doing business in the State during the taxable year, whether or not the person derives any taxable income therefrom" to file a return. Haw. Admin. Rules § 18-235-92(a)(1)(A) clarifies that "[e]very person receiving rent from property owned in the State is deemed to be doing business and shall file a return, whether or not taxable income is derived from the activity." Haw. Admin. Rules § 18-235-92(a)(1)(D) further provides that "[c]hildren receiving income during the taxable year who have not attained the age of fourteen years before the end of the taxable year" must file if gross income exceeds the threshold. The income of a minor child is not included in the parent's gross income except as provided in HRS § 235-7.5 (the kiddie tax).

Source: HRS § 235-92 Source: HRS § 235-54 Source: HRS § 235-5 Source: Haw. Admin. Rules § 18-235-92 Source: Department of Taxation Announcement No. 2024-03 (Act 46, SLH 2024)

Hawaii allows resident taxpayers a credit against Hawaii income tax for income taxes paid to other states or jurisdictions on out-of-state income, subject to specific calculation rules and limitations under HRS § 235-55.

Eligibility and scope

The credit is available to individuals who are Hawaii residents or who have filed a joint resident return under HRS § 235-93 and who have become liable for income taxes to another state, the District of Columbia, Puerto Rico, any other U.S. territory or possession, or a foreign country. The credit applies only to taxes paid on income "derived or received from sources without the State and taxed under the laws of such other jurisdiction irrespective of the residence or domicile of the recipient."

This means the credit is available for taxes paid to another jurisdiction on income sourced to that jurisdiction under its own sourcing rules, regardless of whether the taxpayer is a resident or nonresident of that other jurisdiction for its purposes. Common examples include: wages earned while working in another state, rental income from property located in another state, and business income sourced to another state under that state's apportionment or allocation rules.

Evidence and reciprocity requirements

To claim the credit, the taxpayer must produce for the Hawaii Department of Taxation satisfactory evidence of two facts:

1. Payment proof. That the taxpayer has paid the income tax to the other jurisdiction.

1. No reciprocal credit (or reciprocal credit netted out). That the laws of the other jurisdiction do not allow the taxpayer a credit against the other jurisdiction's taxes for Hawaii taxes paid or payable—or, if the other jurisdiction does allow such a credit, that the amount of that reciprocal credit has been deducted in computing the amount of the credit sought under HRS § 235-55.

This reciprocity requirement prevents double crediting: a taxpayer cannot claim a full Hawaii credit for taxes paid to State X if State X simultaneously gave the taxpayer a credit for Hawaii taxes paid. If both states allow credits, each credit must be reduced by the amount of the reciprocal credit.

Calculation method and limitations

HRS § 235-55(b) imposes two critical limitations on the credit amount:

1. Federal exclusion/exemption/credit limitation. The credit "shall not be allowed with respect to any taxable income or any tax which under subchapter N of chapter 1 of the Internal Revenue Code of 1954 (which is applicable for federal purposes but not for state purposes) is or may be the subject of an exclusion, exemption, or tax credit." This limitation prevents a Hawaii resident from claiming the HRS § 235-55 credit for foreign taxes paid on income that is excluded or exempt for federal purposes (but may be taxable for Hawaii purposes because Hawaii does not adopt that federal provision), or for foreign taxes that generated a federal foreign tax credit. The practical effect is that the HRS § 235-55 credit is primarily a credit for taxes paid to other U.S. states, not a substitute for the federal foreign tax credit.

1. Floor limitation (Hawaii-source income protection). The credit "shall not operate to reduce the tax payable under this chapter to an amount less than that which would have been payable had the taxpayer been taxable only on the income from property owned, personal services performed, trade or business carried on, and other sources in the State." In other words, the credit cannot reduce the Hawaii tax liability below the amount of tax that would be owed if the taxpayer's Hawaii taxable income consisted solely of Hawaii-source income. This floor ensures that Hawaii collects at least the tax on income economically connected to Hawaii.

Illustration of the floor limitation

Assume a Hawaii resident has $100,000 of Hawaii-source income and $50,000 of California-source income (total $150,000). Hawaii taxes the full $150,000. California taxes the $50,000 as nonresident income and the taxpayer pays $3,000 to California.

• Hawaii tax on $150,000 (before credit): assume $10,000.
• Hawaii tax on $100,000 Hawaii-source income only: assume $6,000.
• Maximum allowable credit under the floor limitation: $10,000 - $6,000 = $4,000.

Because the taxpayer paid only $3,000 to California, the credit is $3,000 (the lesser of taxes paid and the floor limitation). If the taxpayer had paid $5,000 to California, the credit would be capped at $4,000 under the floor rule.

Part-year residents

For part-year residents, the credit is allowed only for taxes paid to another state on out-of-state income allocable to the period of residence in Hawaii. Haw. Admin. Rules § 18-235-4-04 states: "The credit for tax paid to another state under section 235-55, HRS, is allowed only for tax paid on out-of-state income allocable to the period of residence." This rule prevents a part-year resident from claiming a credit for taxes paid to another state on out-of-state income earned or received during the period when the taxpayer was not a Hawaii resident.

Recapture rule

If any taxes paid to another jurisdiction for which the taxpayer has been allowed a credit under HRS § 235-55 are at any time credited or refunded to the taxpayer by that other jurisdiction, the taxpayer must report that fact to the Hawaii Department of Taxation within twenty days after the credit or refund. A tax equal to the credit originally allowed for the taxes so credited or refunded becomes due and payable from the taxpayer upon notice and demand from the department. Failure to make the required report is deemed a failure to make a return and is subject to the penalties imposed by law in such cases. If the recapture tax is not paid within ten days from the date of the notice and demand, the taxpayer is subject to the usual penalties and interest for delinquency in payment.

Federal income taxes excluded

HRS § 235-55(d) provides that "[n]othing in this section shall be construed to permit a credit against the taxes imposed by this chapter on account of federal income taxes." The credit is available only for state, local, territorial, possession, and (subject to the federal exclusion limitation above) foreign income taxes—never for federal income taxes.

Source: HRS § 235-55 Source: Haw. Admin. Rules § 18-235-4-04