HB 241 Summary

• Increases the applicable percentage for the income tax credit for household and dependent care services expenses, ranging from 50% (for adjusted gross income not over $25,000) to 40% (for income over $50,000), up from the previous 25% to 15% range.

• Doubles the dollar limits on creditable employment-related expenses from $2,400 to $4,800 for one qualifying individual and from $4,800 to $9,600 for two or more qualifying individuals.

• Requires the Department of Taxation to annually adjust the adjusted gross income thresholds and dollar limits on amounts creditable based on the urban Hawaii consumer price index, effective January 1 each year starting in 2025.

• Applies to taxable years beginning after December 31, 2022, making the changes retroactive to 2023 tax filings.