Key Takeaways
• Hawaii expands its Earned Income Tax Credit to 40% of the federal amount starting January 1, 2025.
• Immigrants with valid SSNs must file federal and Hawaii state tax returns to claim new credits.
• Food Excise Tax Credit doubles in 2025, benefiting low- and moderate-income immigrant families.
Hawaii has made several important changes to its state-level tax benefits and credits for the 2025 tax year, directly affecting immigrants and other residents. These updates include expansions to the Hawaii Earned Income Tax Credit (EITC), adjustments to the Child Tax Credit, and improvements to other state-level tax benefits. Understanding these changes is essential for immigrants who want to maximize their refunds and avoid missing out on valuable support. Here’s a clear summary of what’s new, who is affected, key dates, required actions, and what these changes mean for pending and future tax filings.
Summary of What Changed
Starting January 1, 2025, Hawaii’s tax system offers a more generous Earned Income Tax Credit, now set at 40% of the federal EITC amount. The state has also doubled the Food Excise Tax Credit, giving more relief to working families. While Hawaii does not have its own state-level Child Tax Credit, it continues to recognize the federal Child Tax Credit for state tax purposes. These changes are part of a broader effort to support low- and moderate-income families, including immigrants, and to make the tax system fairer.
Who Is Affected
These updates affect:
– Immigrants who are lawful residents of Hawaii with valid Social Security Numbers (SSNs)
– Resident aliens who meet IRS residency tests
– Low- and moderate-income workers who qualify for the federal EITC
– Families with children who are eligible for the federal Child Tax Credit
– Part-year residents and nonresidents who earn income in Hawaii
– Taxpayers who pay income tax to another state or country while living in Hawaii
Effective Dates
- The new rules for the Hawaii Earned Income Tax Credit and Food Excise Tax Credit took effect on January 1, 2025.
- These changes apply to income earned in 2025, with tax returns due in 2026.
- For the 2024 tax year, the filing deadline is April 21, 2025 for Hawaii state returns and April 15, 2025 for federal returns.
- Taxpayers can request an automatic 6-month extension, moving the Hawaii deadline to October 21, 2025 if needed.
Required Actions for Immigrants
To benefit from these tax credits and state-level tax benefits, immigrants in Hawaii should:
- File a federal income tax return and claim the federal EITC and Child Tax Credit if eligible.
- File a Hawaii state income tax return (Form N-11 for residents or Form N-15 for part-year residents/nonresidents) using the same filing status and dependents as on the federal return.
- Complete and attach the Hawaii EITC Form (N-356) and the Schedule of Tax Credits (SCH-CR) to the state return. The official Hawaii EITC Form N-356 can be found here.
- Ensure all qualifying children and the taxpayer have valid SSNs by the tax return due date (including extensions). Immigrants with only Individual Taxpayer Identification Numbers (ITINs) are not eligible for the EITC.
- Meet residency requirements: Be a U.S. citizen or resident alien for the entire tax year, or pass the IRS residency tests.
- Do not file Form 2555 (Foreign Earned Income Exclusion) if claiming the EITC.
- Claim the Food Excise Tax Credit and other relevant credits by completing the appropriate sections on the Hawaii state return.
- Keep records of taxes paid to other states or countries if claiming a credit for taxes paid elsewhere.
Detailed Overview of Key Tax Benefits
Hawaii Earned Income Tax Credit (EITC)
The Hawaii Earned Income Tax Credit is a refundable credit, meaning it can reduce your tax bill to zero and any leftover amount is paid to you as a refund. For 2025, the Hawaii EITC is set at 40% of the federal EITC amount. This is a significant increase from previous years and is designed to help low- and moderate-income workers, including many immigrant families.
Eligibility Requirements:
– Must file a federal tax return and claim the federal EITC.
– Must file a Hawaii state tax return (Form N-11 or N-15) with the same information as the federal return.
– Must submit Hawaii EITC Form N-356 and Schedule of Tax Credits (SCH-CR).
– Must have a valid SSN for the taxpayer and any qualifying children.
– Must be a U.S. citizen or resident alien for the full year.
– Cannot file Form 2555 (Foreign Earned Income Exclusion).
– For part-year residents or nonresidents, the credit is prorated based on the share of Hawaii income compared to total federal income.
Recent Legislative Changes:
– Senate Bill 1466 (2025) made the 40% rate permanent and clarified how part-year residents and nonresidents can claim the credit.
– The state invested an extra $80 million per year to expand the EITC and other credits, doubling the size of the program.
Practical Implications:
– Lawful immigrants with valid SSNs who meet income limits can receive a substantial refund or reduce their tax bill.
– Filing both federal and state returns on time is crucial to claim the credit.
– The EITC can provide hundreds or even thousands of dollars in support, depending on family size and income.
Child Tax Credit
While Hawaii does not have its own state-level Child Tax Credit, it recognizes the federal Child Tax Credit for state tax purposes. This means that families who qualify for the federal credit can also benefit from it when filing their Hawaii state taxes.
Federal Child Tax Credit Highlights:
– Available to families with children under age 17 who have valid SSNs.
– The credit amount and eligibility depend on income and number of children.
– Immigrants must meet federal residency and SSN requirements to qualify.
State-Level Impact:
– Hawaii encourages families to claim the federal Child Tax Credit and includes it in state tax calculations.
– The Hawaii Children’s Action Network (HCAN) works to raise awareness about the credit and help families file correctly.
Food Excise Tax Credit
The Food Excise Tax Credit is another important state-level benefit. Hawaii has more than doubled this credit for 2025, making it easier for working families to afford basic needs.
Key Points:
– Designed to offset the cost of Hawaii’s food excise tax.
– Available to qualifying taxpayers, including immigrants who file state returns.
– The credit amount depends on income and family size.
Other State-Level Tax Benefits
Standard Deduction and Tax Brackets:
– Standard deduction amounts for 2025 remain the same as in 2024:
– $8,800 for joint filers or surviving spouses
– $6,424 for head of household
– $4,400 for single or married filing separately
– Tax brackets have been widened and rates lowered for lower and middle incomes, helping more families keep their earnings.
– The highest tax rate of 11% applies to incomes over $325,000.
Credit for Taxes Paid to Another State or Country:
– Immigrants who earn income outside Hawaii but are Hawaii residents can claim a credit for taxes paid to another state or country.
– To qualify, the income must be taxed by the other jurisdiction and earned while a Hawaii resident.
– This credit is claimed on Schedule CR with the Hawaii return and helps prevent double taxation.
Filing Guidance for Immigrants
Key Steps:
– Check eligibility for each credit based on SSN status, residency, and income.
– File both federal and state returns using the same information for dependents and filing status.
– Attach all required forms (such as Form N-356 for the EITC and Schedule CR for credits for taxes paid elsewhere).
– Meet deadlines: April 15, 2025, for federal and April 21, 2025, for Hawaii state returns. Extensions are available if needed.
– Seek help if needed: Free tax assistance programs and community organizations like HCAN can help immigrants file correctly and claim all eligible credits.
Important Forms and Where to Find Them:
– Hawaii State Income Tax Return (Form N-11)
– Hawaii EITC Form N-356
– Schedule of Tax Credits (SCH-CR)
– IRS EITC Information
– IRS Child Tax Credit Information
Implications for Pending Applications and Future Filings
If you are an immigrant who filed taxes in previous years but did not claim the Hawaii Earned Income Tax Credit or other state-level tax benefits, you may be able to file an amended return to claim missed credits. For the 2025 tax year, make sure to review your eligibility and file all necessary forms. If you are waiting for a decision on your immigration status, remember that only those with valid SSNs and who meet residency requirements can claim these credits.
For families with pending applications for lawful status, it is important to secure a valid SSN as soon as possible to become eligible for these benefits in future tax years. ITIN holders remain ineligible for the EITC and Child Tax Credit, but may qualify for other credits or deductions.
Expert and Stakeholder Perspectives
Community groups like the Hawaii Children’s Action Network stress the importance of filing taxes to access these refundable credits. These credits can provide a vital boost to household income, especially for immigrant families who may face additional financial challenges. State lawmakers have expanded these programs to help reduce poverty and promote fairness.
Tax professionals recommend that immigrants:
– Keep careful records of income, dependents, and taxes paid.
– Consult with a tax advisor or use free tax help services to avoid mistakes.
– File on time to avoid missing out on refunds.
Background and Historical Context
Hawaii’s state EITC was first introduced in 2017 at 20% of the federal amount. Recent reforms have doubled the credit to 40%, reflecting the state’s commitment to supporting working families. The Food Excise Tax Credit has also been expanded, and tax brackets adjusted to help lower- and middle-income earners. These changes align with Hawaii’s diverse population and the goal of making the tax system more supportive for all residents, including immigrants.
Future Outlook
No major changes to the Hawaii Earned Income Tax Credit, Child Tax Credit, or other state-level tax benefits are expected for the rest of 2025. However, community groups continue to advocate for further expansions, especially for immigrant families. Taxpayers should check the Hawaii Department of Taxation website for updates and new announcements.
Official Resources
For the most accurate and up-to-date information, visit the Hawaii Department of Taxation. Here you can find all official forms, instructions, and updates about the Hawaii Earned Income Tax Credit, Child Tax Credit, and other state-level tax benefits. The IRS website also provides detailed guidance on federal credits.
As reported by VisaVerge.com, these recent changes to Hawaii’s tax credits and benefits represent a major step forward for immigrant families, offering more support and making it easier to afford basic needs. Filing both federal and state returns on time, with all required forms, is the key to unlocking these benefits.
Actionable Takeaways for Immigrants in Hawaii:
– Check your eligibility for the Hawaii Earned Income Tax Credit, Child Tax Credit, and Food Excise Tax Credit.
– Gather all necessary documents, including SSNs for yourself and your children.
– File both federal and Hawaii state tax returns using the correct forms and schedules.
– Claim all credits you qualify for to maximize your refund or reduce your tax bill.
– Seek help from community organizations or tax professionals if you have questions or need assistance.
– Monitor official government websites for any updates or changes to tax laws and credits.
By following these steps, immigrants in Hawaii can take full advantage of the state’s expanded tax benefits and credits in 2025, helping to build a more secure financial future for themselves and their families.
Learn Today
Earned Income Tax Credit (EITC) → A refundable tax credit for low- to moderate-income workers based on earned income and family size.
Social Security Number (SSN) → A unique number assigned to U.S. residents for tax and identification purposes.
Form N-11 → Hawaii state income tax return form for full-year residents claiming various credits.
Form 2555 → Federal tax form for Foreign Earned Income Exclusion, incompatible with claiming the EITC.
Food Excise Tax Credit → A Hawaii state credit designed to offset the state’s food excise tax for qualifying taxpayers.
This Article in a Nutshell
Hawaii’s 2025 tax changes boost support for immigrant families through a 40% federal EITC match and doubled Food Excise Tax Credit, requiring filing of both state and federal returns with specific forms for eligibility.
— By VisaVerge.com
