On July 10, 2017, Governor David Ige signed HB 209, a bill creating a non-refundable state Earned Income Tax Credit (EITC) worth up to 20 percent of the federal EITC. With this new law, Hawai‘i joins 28 other states and D.C. in offering a state-level EITC to help working families keep more of their earnings.
It is estimated that the new tax credit will provide $130 million in tax relief for low-income and working-class families over its first 6 years. Other components of the Hawai‘i Tax Fairness package encompassed by HB 209 are the repeal of the sunset date for improvements to the refundable food/excise tax credit and the reinstatement of higher-income tax brackets that had been repealed in 2015.
Mahalo to the members of the Hawai‘i Tax Fairness Coalition and legislators who have worked for many years to create a state EITC. Though there is still much to be done, this victory brings Hawai‘i closer to a tax system that makes sense.