HI SB3125

Amends Hawaii's state income tax brackets for joint filers and surviving spouses, with phased changes beginning after December 31, 2026, and additional changes after December 31, 2028.

Raises the income threshold for the lowest 1.40% tax bracket from $19,200 to $28,800 (for tax years after 2026) and further to $38,400 (for tax years after 2028).

Restructures the upper tax brackets for high earners: the 11% top rate would apply to income over $650,000 (down from $800,000 in the prior schedule), with intermediate brackets also adjusted.

Increases the 8.25% bracket threshold to cover income from $350,000 to $450,000, while eliminating the previous 7.90% bracket for that range.

Provides tax relief for lower and middle-income taxpayers by expanding the income ranges subject to lower tax rates while maintaining higher rates on upper-income earners.