H.B. 1178 Summary

• Establishes a refundable child tax credit equal to 20% of the federal child tax credit allowed and claimed on a taxpayer's federal income tax return.

• Applies to qualifying individual taxpayers who file both a federal income tax return claiming the child tax credit and a Hawaii income tax return with the same filing status and dependents.

• For part-year residents, the tax credit is calculated by multiplying the credit amount by the ratio of Hawaii adjusted gross income to federal adjusted gross income.

• Allows excess credits over income tax liability to be refunded to the taxpayer, with no refunds issued for amounts less than $1, and requires claims to be filed within 12 months after the close of the taxable year.

• Requires the Director of Taxation to prepare necessary forms, alert eligible taxpayers, and submit annual reports to the legislature and governor detailing the number of credits granted, total amount, and average credit values by income ranges; applies to taxable years beginning after December 31, 2020.