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HB574
HOUSE OF REPRESENTATIVES
H.B. NO.
574
THIRTY-THIRD LEGISLATURE, 2025
STATE OF HAWAII
A BILL FOR AN ACT
relating
to Taxation
.
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 the Hawaii National
Guard has been vital to the safety and protection of the people of Hawaii from
floods, hurricanes, lava eruptions, and wildfires.
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Soldiers and airmen of the Hawaii National
Guard support the local communities in response to natural disasters,
human-caused crises, and the unique needs of the State.
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Retired service members of the Hawaii
National Guard are often the first line of volunteers in an emergency event
because of their strong military training and specialized skills.
The legislature further finds that retired
service members of the Hawaii National Guard have made significant personal,
family, and financial sacrifices.
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Although
these retirees recognized their duty and proudly served their nation, the
call-up undeniably disrupted their personal and professional lives.
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While in service, many suffered a loss of
income while still having to meet rents and mortgages, car payments, childcare
costs, tuition fees, and a host of other expenses.
The legislature recognizes that retired service
members of the Hawaii National Guard represent an asset to the State's economy
and communities.
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States have created
various tax benefits for former or retired military service members.
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For example, Minnesota offers an income tax
credit for past military service.
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Maryland
established tax incentives for small business owners to hire veterans.
As of 2021, 4,500 retired Hawaii
National Guard service members reside in the State.
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The legislature finds that expanded tax
benefits will help keep these experienced military retirees home.
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Accordingly, the purpose of this Act is to
establish an income tax credit for retired service members of the Hawaii
National Guard, subject to an income limitation.
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SECTION 2.
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Chapter 235, Hawaii Revised Statutes, is
amended by adding a new section to be appropriately designated and to read as
follows:
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�235-
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Hawaii national guard retiree income tax
credit.
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(a)
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A qualified individual taxpayer may claim a tax credit under this
section against the Hawaii state individual net income tax for past service in
the Hawaii national guard.
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The tax
credit shall be $3,000.
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(b)
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The
tax credit allowed under this section shall be claimed against the net income
tax liability for the taxable year.
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All
claims for the 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 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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(c)
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No
taxpayer shall be allowed the tax credit under this section if the taxpayer
excludes from taxation any compensation received in the form of a pension for
past services under section 235-7.
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(d)
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The director of taxation shall prepare any
forms that may be necessary to claim a tax credit under this section.
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The director may also require the taxpayer to
furnish reasonable information to ascertain the validity of the claim for the
tax credit made under this section and may adopt rules under chapter 91
necessary to effectuate the purposes of this section.
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(e)
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As used in this section, "qualified
individual taxpayer" means a taxpayer who:
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(1)
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Files a Hawaii
individual income tax return for a taxable year;
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(2)
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Has an adjusted
gross income of less than $77,950;
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(3)
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Separated from
the Hawaii national guard before the end of the taxable year; and
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(4)
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Has met one of
the following criteria:
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(A)
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Has
served at least 20 years in the Hawaii national guard;
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(B)
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Has
a service-connected disability rating of 100 percent for a total and permanent
disability that was incurred in, or aggravated during, service in the Hawaii
national guard; or
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(C)
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Is
eligible for compensation from a pension or other retirement pay for service in
the Hawaii national guard.
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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:
Hawaii National
Guard; Retirees; Income Tax Credit
Description:
Establishes
an income tax credit of $3,000 for
retired service members of the Hawaii
National Guard.
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The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.