Hawaii Legislature Proposes Changes to Income Tax Plan Affecting Tax Credits and High Earners
The Hawaii Senate and House money committees have reached a compromise on a measure that impacts the state's income tax plan, which includes significant tax cuts and changes to tax credits. The proposal continues income tax cuts for most brackets but pauses future cuts for the top four income levels, affecting individuals earning over $175,000 and couples earning over $350,000 annually. A new tax bracket for millionaires is introduced, taxing income over $1 million for joint-filers and $500,000 for single-filers at 13%. The measure also phases out several tax credits, including the Capital Goods Tax Credit by 2028 and the Renewable Energy Tax Credit by 2031. The proposal is part of a broader effort to stabilize the state's finances, which are projected to face a $400 million shortfall by 2032 due to federal funding cuts. 
