HI SB2205

Establishes a refundable state earned income tax credit equal to 10% of the federal earned income tax credit claimed on a taxpayer's federal return.

Applies to resident individual taxpayers who file a Hawaii income tax return and cannot be claimed as dependents, with a modified calculation for nonresident taxpayers based on income attributed to Hawaii.

Excess credits over tax liability are refunded to the taxpayer, with a minimum refund threshold of $1; claims must be filed within 12 months of the tax year end.

Imposes a $100 penalty on tax return preparers who fail to comply with federal due diligence requirements regarding the earned income tax credit.

Requires the director of taxation to prepare forms, alert eligible taxpayers, and submit annual reports to the legislature and governor detailing the number of credits granted, total amounts, and average credit values by income range.