H.B. 1207 Summary

• Reduces Hawaii income tax complexity by consolidating 13 tax brackets into 4 brackets for taxable years beginning after December 31, 2023.

• Implements new tax rates: 0% on income under the threshold amount, 2.5% for lower-middle income, 5.0-7.5% for middle income, and 10.0% on income over $300,000 (varies by filing status).

• Establishes tax-free income thresholds: $5,000 for joint filers, $3,800 for heads of household, and $2,500 for single filers and married individuals filing separately.

• Applies new tax structure to joint return filers, surviving spouses, heads of household, unmarried individuals, and married individuals filing separately with corresponding income brackets and rates.

• Effective for all taxable years beginning after December 31, 2023.