HB574 creates a new Hawaii state individual income tax credit for retired Hawaii National Guard service members. The credit is set at $3,000 and is available to a qualified individual taxpayer who files a Hawaii return, has adjusted gross income below $77,950, has separated from the Hawaii National Guard by the end of the taxable year, and meets one of three service-related conditions: at least 20 years of service, a 100 percent service-connected permanent disability, or eligibility for pension/retirement pay for National Guard service.
The bill also sets administrative rules for claiming the credit. Claims, including amended claims, must be filed within 12 months after the close of the taxable year, and the Department of Taxation is authorized to create forms, request supporting information, and adopt rules to implement the credit. The credit cannot be claimed by taxpayers who exclude pension compensation under section 235-7, and the measure applies to taxable years beginning after December 31, 2025.
Impact
If enacted, HB574 would amend chapter 235 of the Hawaii Revised Statutes by adding a new income tax credit targeted to retired Hawaii National Guard members. It would reduce state individual income tax liability for eligible retirees and create a new tax expenditure for the state, while also requiring the Department of Taxation to administer and verify claims. The bill is limited by income and service criteria, so its benefits would apply only to a defined subset of former Guard members and would begin with tax years after 2025.
Sentiment
The bill’s stated purpose and framing are strongly supportive of Hawaii National Guard retirees, emphasizing their service, sacrifice, and value to the state during emergencies and disasters. The available record does not include committee testimony, votes, or recorded opposition, so there is no documented public debate in the provided materials. Based on the text alone, the measure appears to be presented as a veterans’ tax benefit with a favorable policy rationale.
Contention
The main policy issues embedded in the bill are eligibility and fiscal cost. The credit is restricted by an income cap, a separation requirement, and service-based qualifications, which may limit access and could be a point of discussion for those concerned about fairness or targeting. Another possible point of contention is the interaction with existing pension-related tax treatment, since taxpayers who exclude certain pension compensation under section 235-7 are barred from claiming the credit. No specific objections or competing viewpoints are included in the provided legislative history.
A resolution to direct the Clerk of the House of Representatives to only present to the Governor enrolled House bills finally passed by both houses of the One Hundred Third Legislature.
Relating to nonsubstantive additions to, revisions of, and corrections in enacted codes, to the nonsubstantive codification or disposition of various laws omitted from enacted codes, and to conforming codifications enacted by the 88th Legislature to other Acts of that legislature.