HB 1776 Summary

• Updates Hawaii's conformity with federal income tax deductions by changing the reference year for itemized deduction thresholds from 2009 to 2013 under Section 68 of the Internal Revenue Code.

• Modifies state and local tax deduction rules under Section 164 by removing the federal $10,000 limitation on state and local tax deductions for Hawaii taxpayers.

• Establishes new income tax brackets for taxable years beginning after December 31, 2023, adjusting threshold amounts and tax rates for joint filers, heads of household, and single taxpayers.

• Temporarily amends the child and dependent care tax credit by adjusting the applicable percentage calculation based on adjusted gross income thresholds for taxable years beginning after December 31, 2023, with provisions expiring December 31, 2027.

• Adds disallowance periods for the child and dependent care tax credit: 10 years following a fraud finding and 2 years following a final decision disallowing the credit.