HI SB281

Establishes a state income tax deduction for contributions made to Hawaii's college savings program (HI529) established under chapter 256 of Hawaii Revised Statutes.

Allows single filers and married couples filing separately to deduct up to $4,000 annually; joint filers, heads of household, and surviving spouses may deduct up to $8,000 annually.

Limits the deduction to "qualified taxpayers" whose income meets Roth IRA contribution eligibility requirements under Internal Revenue Code section 408A(c)(3).

Permits excess contributions exceeding annual limits to carry forward as deductions for up to four subsequent taxable years.

Requires recapture of previously deducted contributions added back to taxable income if the taxpayer makes nonqualified withdrawals subject to federal penalties.