HB 707 Summary

• Establishes a state income tax deduction for contributions to Hawaii 529 college savings accounts and Hawaii ABLE savings program accounts, with maximum annual deductions of $5,000 for single filers and $10,000 for married filers.

• Conforms Hawaii law to federal Tax Cuts and Jobs Act of 2017 amendments allowing 529 plan funds to be used for K-12 elementary and secondary school expenses in addition to higher education expenses.

• Makes contributions eligible for deduction only in the taxable year they are made, with withdrawals for non-qualified expenses subject to recapture as taxable income consistent with federal penalties.

• Directs the director of taxation to prepare forms and establish rules for claiming the deduction and may require proof of contributions.

• Effective July 1, 3000 (appears to be a typographical error for July 1, 2025), applying to taxable years beginning after December 31, 2024.