SB567 would create a new Hawaii state individual income tax credit for certain out-of-pocket travel expenses incurred to obtain medical care for the taxpayer or a dependent. The bill is aimed at residents who must travel to another island or outside the state for treatment and who pay for expenses such as airfare, lodging, transportation, and meals that are not covered by insurance. It is designed as targeted relief for residents facing high medical travel costs, especially those in rural, underserved, low-income, senior, or chronically ill populations.
The credit would be available to resident taxpayers who are not claimed as dependents by another taxpayer and who file an individual net income tax return. The bill sets out that the credit would apply only to travel expenses that are primarily for and essential to medical care, and it would be refundable if the credit exceeds the taxpayer’s income tax liability. The measure also directs the Department of Taxation to create forms, verify claims, and adopt rules to administer the credit. The bill would apply to taxable years beginning after December 31, 2024.
Impact
If enacted, SB567 would amend chapter 235, Hawaii Revised Statutes, by adding a new income tax credit for medical travel expenses. It would affect resident individual taxpayers who incur qualifying travel costs for medical care, including expenses for themselves or dependents, and would potentially reduce state income tax liability or generate refunds for eligible claimants. The bill also gives the Department of Taxation administrative authority to implement the credit and would operate prospectively for tax years beginning after December 31, 2024.
Sentiment
The bill’s stated purpose and framing suggest generally favorable policy sentiment toward helping residents access healthcare and reducing the financial burden of medical travel. The legislative findings emphasize equity, access to care, and relief for vulnerable populations, indicating a strong supportive rationale. No committee transcripts or recorded votes were provided, so there is no direct evidence of opposition or amendment debate in the available record.
Contention
The main potential points of contention are fiscal cost, eligibility limits, and administrative complexity. Because the bill creates a refundable credit, lawmakers may be concerned about state revenue impacts and the risk of claims that are difficult to verify. The bill also leaves key policy details blank in the text provided, including the adjusted gross income threshold and the percentage of expenses covered, which suggests those parameters could be the subject of negotiation. In addition, defining what travel is “primarily for, and essential to” medical care may raise implementation and documentation issues for taxpayers and the Department of Taxation.