HI HB2126

Establishes a tax credit for qualified small businesses that provide bonuses to employees, deductible from net income tax liability for the taxable year claimed.

Tax credit amount is per qualified employee with a maximum limit (specific dollar amounts left blank in bill text).

Unused tax credits may carry forward to subsequent taxable years until exhausted, with all claims required to be filed within twelve months following the close of the taxable year or the credit is forfeited.

Defines "small business" as a for-profit entity domiciled in Hawaii, independently owned and operated, and employing fewer than 100 full-time or part-time employees in Hawaii.

Applies to taxable years beginning after December 31, 2023, with the Director of Taxation authorized to prepare forms and adopt rules for implementation.