H.B. 813 Summary

• Temporarily exempts unemployment compensation from Hawaii state income tax for taxable years beginning after December 31, 2010 through December 31, 2014.

• Excludes unemployment compensation from gross income, adjusted gross income, and taxable income, except for taxpayers exceeding specified income thresholds from other sources.

• Income thresholds: exclusion does not apply if taxpayer earns more than $28,800 from non-unemployment sources or if spouse earns more than $48,000 from non-unemployment sources.

• Modifies Hawaii Revised Statutes Chapter 235 and related sections to make federal Internal Revenue Code Section 85 (unemployment compensation taxation) inoperative during the exemption period.

• Requires the Department of Labor to advise unemployment compensation claimants that benefits may be subject to state or local income tax, with options to elect withholding.