H.B. 761 Summary

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

• Removes the requirement to advise unemployment claimants that benefits are subject to state income tax in section 383-163.6(a)(1), clarifying only federal income tax applies.

• Maintains existing provisions allowing claimants to elect federal and state income tax withholding, but state withholding now applies only to those who voluntarily elect it.

• Takes effect retroactively to January 1, 2021.