HI HB25

Exempts income received as unemployment compensation benefits under chapter 383 from Hawaii state income tax by adding it as a new exclusion to section 235-7(a)(13).

Removes reference to state income tax from section 383-163.6(a)(1), clarifying that unemployment compensation is subject to federal income tax only (state income tax obligation is eliminated).

Maintains existing provisions allowing individuals to elect federal income tax withholding and state income tax withholding from unemployment benefits, even though state tax is now exempt.

Takes effect retroactive to January 1, 2021.