HB 437 Summary

• Establishes a nonrefundable state child tax credit for Hawaii residents claiming individual income tax credits for qualifying children.

• Credit amounts vary by filing status and adjusted gross income: $500 per child for single filers/married filing separately earning up to $35,000; $250 per child earning $35,000-$75,000; and $0 for income over $75,000.

• Heads of household receive $500 per child earning up to $55,000 and $250 earning $55,000-$107,500; married couples filing jointly receive $500 per child earning up to $75,000 and $250 earning $75,000-$140,000.

• Allows noncustodial parents to claim the credit if a court awards it in writing or the custodial parent signs a declaration not to claim it; part-year residents receive proportional credits.

• Excess credits over tax liability may carry forward to subsequent years and must be claimed within 12 months after the close of the taxable year; applies to taxable years beginning after December 31, 2020.