S.B. 648 Summary

• Establishes a state earned income tax credit equal to a percentage of the federal earned income tax credit, available to individual taxpayers who file Hawaii tax returns and are not claimed as dependents; credits are refundable and paid to taxpayers with no income tax liability.

• Modifies Hawaii income tax rates for taxable years beginning after December 31, 2016, by increasing the zero-tax bracket thresholds and adding higher tax brackets (9%, 10%, and 11%) for higher-income taxpayers across all filing statuses (joint filers, heads of household, and single filers).

• Repeals the sunset provision in Act 223, Session Laws of Hawaii 2015, making permanent the amendments to the refundable food/excise tax credit that were set to expire December 31, 2017.

• Appropriates $250,000 for fiscal years 2017-2018 and 2018-2019 to the Department of Taxation to purchase tax preparation assistance services from organizations operating outreach programs for the earned income tax credit.

• Effective date is August 30, 2050, with applicability to taxable years beginning after December 31, 2049.