HB 1612 Summary

• Exempts unemployment compensation benefits from Hawaii state personal income tax, effective for taxable years beginning after December 31, 2022.

• Requires the Department of Taxation to retroactively refund any state income tax withheld from individuals receiving unemployment compensation benefits between January 1, 2023, and December 31, 2023.

• Increases the maximum weekly unemployment benefit from 75% of average weekly wage to 85% of average weekly wage, effective for benefit years beginning January 1, 2025.

• Removes the option for individuals to voluntarily elect state income tax withholding from unemployment compensation payments by repealing section 235-69 and removing related provisions from sections 383-161, 383-163, and 383-163.6.

• Addresses financial hardship for unemployed workers and disaster victims, citing Hawaii's high cost of living and the impact of the August 2023 Maui wildfires on employment.