HI HB1178

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

Credit applies only to qualifying individual taxpayers who file both federal and Hawaii income tax returns claiming the child tax credit and reporting the same dependents on both returns.

Excess credit over income tax liability shall be refunded to the taxpayer, with a $1 minimum threshold for refunds and a 12-month filing deadline.

Director of taxation must prepare necessary forms, alert eligible taxpayers, and submit annual reports to the legislature and governor detailing number of credits granted, total amount, and average credit value by income ranges.

Applies to taxable years beginning after December 31, 2020; fraudulent claims trigger a 10-year disallowance period and disallowed claims trigger a 2-year disallowance period.