Hawaiʻi bill will create historic new working families tax credit

On May 2, the Hawaiʻi State House of Representatives and the Hawaiʻi State Senate both voted to pass HB209. This puts us just one step away from a working family tax credit and greater tax fairness for low-income residents in Hawaiʻi.

Speaker of the House Scott Saiki called passage of the state Earned Income Tax Credit (EITC) the “most consequential work in the last few years to reduce poverty and Hawaiʻi’s high cost of living.”

Hawaiʻi Appleseed led the coalition effort to get the state EITC passed this past legislative session. The bill now awaits Governor Ige’s signature to become law. The governor has until July 11 to veto any bills passed this legislative session.

The tax credit will generate an estimated $12.7 million in tax relief for low-income working families in its first year, and over $27 million by its fifth year. A significant portion of the 104,000 households and 128,000 children in Hawaiʻi who receive the federal EITC will benefit from this new credit.

Additionally, HB209 will make permanent the Low-Income Food/Excise Tax Credit intended to offset a portion of the state’s regressive General Excise Tax (GET). The total package means more than $136 million in tax relief for low-income households over five years, putting money back into the pockets of the people who need it most to make ends meet and powering our consumer economy.

Find out more about our work to change Hawaiʻi’s tax system at www.hitaxfairness.org or by reading our recent report, “Struggling to Make Ends Meet: The Need for a Working Family Credit.”