HI SB2299

Creates 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 Hawaii income tax returns and are not claimed as dependents; non-resident taxpayers receive a pro-rated credit based on income attributed to Hawaii.

Requires taxpayers to use the same filing status on Hawaii returns as used on federal returns and to claim credits within 12 months following the close of the taxable year.

Imposes penalties of $100 per failure on tax return preparers who fail to meet federal due diligence requirements for determining credit eligibility and amount.

Requires the Director of Taxation to prepare forms, alert eligible taxpayers, and submit annual reports to the legislature containing the number of credits granted, total amount, and average credit value by income range; effective for taxable years beginning after December 31, 2016.