HOUSE OF REPRESENTATIVES

H.B. NO.

1719

TWENTY-SEVENTH LEGISLATURE, 2014

 

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

RELATING TO TAXATION.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 


SECTION 1. Chapter 235, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"235- Low-income tax credit. (a) There shall be allowed to each taxpayer subject to the taxes imposed by this chapter, a tax credit to reduce or eliminate the state income tax liability for low-income taxpayers. After completing the income tax calculations required by this chapter, a taxpayer with a federal adjusted gross income below the federal poverty guidelines and with a state income tax liability shall receive a credit that eliminates the taxpayer's state income tax liability. A taxpayer with a federal adjusted gross income of at least one hundred but not more than one hundred twenty-five per cent of the federal poverty guidelines and with a state income tax liability shall receive a credit that reduces the taxpayer's state income tax liability by fifty per cent. A taxpayer with a federal adjusted gross income above one hundred twenty-five per cent of the federal poverty guidelines shall be ineligible for the credit.

(b) For purposes of this section:

"Federal poverty guidelines" means the guidelines set forth by the United States Department of Health and Human Services each year for Hawaii.

(c) All claims for a tax credit under this section, including amended claims, shall be filed on or before the end of the twelfth month following the close of the taxable year for which the tax credit may be claimed. Failure to comply with the foregoing provision shall constitute a waiver of the right to claim the tax credit.

(d) The director of taxation shall prepare any forms that may be necessary to claim a credit under this section. The director may also require the taxpayer to furnish information to ascertain the validity of the claim for the tax credit made under this section and may adopt rules necessary to effectuate the purposes of this section pursuant to chapter 91."

SECTION 2. New statutory material is underscored.

SECTION 3. This Act, upon its approval, shall apply to taxable years beginning after December 31, 2013.

 

INTRODUCED BY:

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Report Title:

Tax Credit; Low-Income Taxpayers

 

Description:

Reduces the tax liability for low-income taxpayers by creating a tax credit that will eliminate a taxpayer's income tax liability if their federal adjusted gross income falls below federal poverty guidelines. Reduces a taxpayer's income tax liability by 50% if the taxpayer's federal adjusted gross income falls between 100-125% of federal poverty guidelines.

 

 

 

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