HB 437 Summary

• Establishes a nonrefundable state child tax credit against Hawaii individual income tax for taxpayers with qualifying children as defined in Internal Revenue Code Section 24(c).

• Credit amounts vary by filing status and adjusted gross income: single filers and married filing separately receive $500 per child (AGI not over $35,000), $250 (AGI $35,001-$75,000), or $0 (AGI over $75,000).

• Head of household filers receive $500 per child (AGI not over $55,000), $250 (AGI $55,001-$107,500), or $0 (AGI over $107,500); married filing jointly and surviving spouses receive $500 per child (AGI not over $75,000), $250 (AGI $75,001-$140,000), or $0 (AGI over $140,000).

• Credit is limited to Hawaii residents only; part-year residents receive a proportional credit based on months domiciled in Hawaii.

• Any excess credit over tax liability may be carried forward to subsequent years until exhausted; credit claims must be filed within 12 months after the close of the taxable year.

• Applies to taxable years beginning after December 31, 2020.