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HB2214
HOUSE OF REPRESENTATIVES
H.B. NO.
2214
THIRTY-THIRD LEGISLATURE, 2026
STATE OF HAWAII
A BILL FOR AN ACT
RELATING
TO tax credits
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
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SECTION 1.
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The
legislature finds that Hawaii has the highest cost of living in the nation.
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The general excise tax is levied on nearly
every economic activity, which, due to the highly regressive structure of the
tax, disproportionately affects low- and middle-income families.
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This regressive nature makes it difficult for
some families to afford basic life necessities, such as diapers.
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Diapers are a large expense for Hawaii families with
small children and are essential to babies' and toddlers' health as they each require
about fifty diaper changes per week, or roughly two hundred diaper changes per
month.
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However, according to the
National Diaper Bank Network, one in two families struggles to afford clean
diapers for their children.
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Hawaii children who come
from low-income families are at-risk to meet their diaper needs.
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According to the National Diaper Bank Facts on
Hawaii, nine per cent of Hawaii families are recipients of supplemental
nutrition assistance program
benefits with children under the age of five;
twenty-one per cent of Hawaii families are women, infants, and children program
benefit recipients with infant children; and twenty-eight per cent of Hawaii
families receive temporary assistance for needy families benefits with at least
one child under the age of three.
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The
maximum amount a family of one parent and two children can receive in temporary
assistance for needy families benefits is $763.
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It is estimated that ten and a half per cent
of this maximum benefit goes toward diaper needs.
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Additionally, thirty-four per cent of Hawaii
families have births covered by medicaid.
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This data shows that there is a significant
number of families who are at risk of not having enough financial resources to
provide necessities, such as diapers, for their children.
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The legislature further finds that
many child care facilities
require parents to provide diapers for their children.
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Families who do not have access to clean
diapers cannot access child care and often miss work, reducing their monthly
income.
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Hawaii currently has two
National Diaper Bank Network member diaper banks that provide diapers to
families; however, this does not meet the needs of all families who struggle to
provide clean diapers for their children.
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According to the National Diaper Bank Network, Hawaii families spend an
average monthly cost of $80 to more than $100 on diapers.
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The State is also the most expensive state to
raise a child, requiring approximately $36,000 a year.
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On average, Hawaii families spend a little
more than twenty-five per cent of their income on child-related expenses.
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The legislature also
finds that dirty diapers put healthy children at risk of various diseases due
to parasites, bacteria, and viruses linked to dirty diapers.
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Dirty diapers can cause diaper rash or diaper
dermatitis, including
Candida,
a type of yeast infection, and
Seborrhea,
a type of infectious skin condition caused when skin is exposed to
moisture, friction, urine, stool, or other skin irritants.
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Other germs found in dirty diapers are
salmonella, listeria, and norovirus, which can cause a healthy child to quickly
fall ill.
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Hepatitis A is the most common
viral infection found in dirty diapers, which can lead to other
hepatitis-related infections, according to the American Academy of Pediatrics.
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The American Academy of Pediatrics also notes
that certain diaper dermatitis can lead to bladder infections that can cause
urinary tract infections, which more commonly affect girls.
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Accordingly, the purpose
of this Act is to help alleviate the burden on local families and individuals
by establishing a refundable diaper income tax credit.
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SECTION 2.
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Chapter 235, Hawaii Revised Statutes, is
amended by adding a new section to part VI to be appropriately designated and
to read as follows:
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"
�235-
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Refundable
diaper tax credit.
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(a)
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There shall be allowed to each eligible taxpayer subject to the taxes
imposed by this chapter a refundable tax credit equal to $50 per qualifying
child for the taxable year.
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(b)
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The credit allowed under this section shall
be claimed against the net income tax liability for the taxable year.
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If the tax credit claimed by the taxpayer
under this section exceeds the amount of the income tax payments due from the
taxpayer, the excess of credit over payments due shall be refunded to the
taxpayer; provided that the tax credit properly claimed by a taxpayer who has
no income tax liability shall be paid to the taxpayer; provided further that no
refunds or payments on account of the tax credit allowed by this section shall
be made for amounts less than $1.
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(c)
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All claims, including amended claims, for a
tax credit under this section shall be filed on or before the end of the
twelfth month following the close of the taxable year for which the credit may
be claimed.
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Failure to comply with the
foregoing provision shall constitute a waiver of the right to claim the credit.
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(d)
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The director of taxation:
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(1)
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Shall prepare
such forms as may be necessary to claim a credit under this section;
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(2)
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May require
proof of the claim for the tax credit; and
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(3)
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May adopt rules
pursuant to chapter 91 necessary to carry out the purpose of this section.
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(e)
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For purposes of this section:
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"Diaper expenses" means
amounts paid by the taxpayer for the purchase of diapers, including disposable
diapers, washable diapers, diaper covers, and necessary diapering supplies.
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"Eligible taxpayer"
means an individual taxpayer who:
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(1)
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Files a:
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(A)
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Head
of household return with federal adjusted gross income of less than $90,000; or
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(B)
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Joint
return or return of surviving spouse with federal adjusted gross income of less
than $120,000;
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(2)
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Has one or more
qualifying child; and
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(3)
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Incurred at
least $250 in diaper expense during the taxable year for one or more dependent
children in the household.
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"Eligible taxpayer" does not
include a married couple filing separate tax returns for a taxable year for
which a joint return could have been filed.
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"Qualifying child"
means a dependent, as defined by section 152 of the Internal Revenue Code, who
is under five years of age at any time during the taxable year and who resides
with the eligible taxpayer in the State.
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SECTION
3.
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New statutory material is
underscored.
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SECTION 4.
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This Act, upon its approval, shall apply to
taxable years beginning after December 31, 2025.
INTRODUCED BY:
_____________________________
Report Title:
Refundable
Diaper Tax Credit
Description:
Establishes
a refundable diaper income tax credit.
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.