THE SENATE

S.B. NO.

162

THIRTIETH LEGISLATURE, 2019

S.D. 1

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 part I to be appropriately designated and to read as follows:

"235-   Hiring an elderly individual; income tax credit. (a) There shall be allowed to each taxpayer subject to the tax imposed by this chapter, a credit for the hiring of an elderly individual that shall be deductible from the taxpayer's net income tax liability, if any, imposed by this chapter for the taxable year in which the credit is properly claimed.

(b) The amount of the credit shall be equal to twenty-five per cent of the qualified wages for the first twelve months after the elderly individual is initially hired. A tax credit that exceeds the taxpayer's income tax liability may be used as a credit against the taxpayer's income tax liability in subsequent years until exhausted; provided that in no taxable year shall the total amount of the tax credit claimed under this section exceed $           per taxpayer.

(c) The following wages paid to an elderly individual are ineligible to be claimed by the taxpayer for this credit:

(1) Wages paid to an elderly individual:

(A) Who bears to the taxpayer any of the relationships described in section 152(d)(2)(A) through (H) of the Internal Revenue Code;

(B) If the taxpayer is a corporation and the elderly individual owns, directly or indirectly, more than fifty per cent in value of the outstanding stock of the corporation (determined with the application of section 267(c) of the Internal Revenue Code); or

(C) If the taxpayer is an estate or trust and the elderly individual is a grantor, beneficiary, or fiduciary of the estate or trust, or bears to a grantor, beneficiary, or fiduciary of the estate or trust any of the relationships described in section 152(d)(2)(A) through (H) of the Internal Revenue Code; and

(2) Wages paid to any elderly individual if, prior to the day the individual is hired by the employer, the individual had been employed by the employer at any time.

(d) In the case of a successor employer referred to in section 3306(b)(1) of the Internal Revenue Code, the determination of the amount of the tax credit allowable under this section with respect to wages paid by the successor employer shall be made in the same manner as if the wages were paid by the predecessor employer referred to in section 3306(b)(1) of the Internal Revenue Code.

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

(f) The director of taxation:

(1) Shall prepare any forms necessary to claim a credit under this section;

(2) May require a taxpayer to furnish reasonable information to ascertain the validity of a claim for credit; and

(3) May adopt rules pursuant to chapter 91 to effectuate the purposes of this section.

(g) For purposes of this section:

"Elderly individual" means an individual who is sixty-seven years of age or older.

"Qualified wages" means wages attributable to work rendered by an elderly individual for the twelve-month period after the individual is initially hired. "Qualified wages" shall not include amounts for which another credit is claimed or a deduction is taken.

"Wages" means wages, commissions, fees, salaries, bonuses, and all other kinds of remuneration for, or compensation attributable to, services performed by an employee for the employee's employer that are paid in cash, but excluding income excluded from gross income by section 235-7 or other provisions of this chapter."

SECTION 2. New statutory material is underscored.

SECTION 3. This Act, upon its approval, shall apply to taxable years beginning after December 31, 2019.

 



 

Report Title:

Hawaii State Association of Counties Package; Taxation; Income Tax Credit; Elderly Persons; Employment

 

Description:

Provides to a taxpayer who hires an elderly individual a nonrefundable tax credit for the twelve-month period after the individual is initially hired by the taxpayer. Applies to taxable years beginning after 12/31/2019. (SD1)

 

 

 

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