HB 241 Summary

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

• Doubles the dollar limits on amounts creditable 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 based on changes in the urban Hawaii consumer price index, effective January 1 each year beginning 2024.

• Applies to taxable years beginning after December 31, 2022.

• Supports early learning and child care by improving tax credits that help parents afford care services necessary for employment.