Fill - Free fillable 2019 N-11 Hawaii Resident Income Tax Instructions E- (Hawaii) PDF form

2019 N-11

STATE OF HAWAII — DEPARTMENT OF TAXATION

Hawaii Resident Income Tax Instructions

Caution: Part-Year Residents Must Use Form N-15

MESSAGE FROM THE DIRECTOR

I. Department of Taxation Welcomes your Feedback

At the Depar

tment of Taxation, we are committed to our mission to administer the tax laws of the

State of Hawaii in a consistent, uniform, and fair manner. To help us with this commitment, we

welcome your feedback to assist our effort to improve our services and make voluntary compliance

as easy as possible. Please address your written suggestions to the Department of Taxation, P.O. Box

259, Honolulu, HI, 96809-0259, or email them to Tax.Directors.Ofﬁ ce@hawaii.gov.

II. Electronic Filing and Paying Advances Are Being Made

Each year, thousands of individuals ﬁ le and pay their taxes electronically. You can e-ﬁ le yourself or

through your tax practitioner using commercially available software. For up to date information, visit

our website at tax.hawaii.gov.

III. We are Here to Assist You

Form N-11, Individual Income Tax Return (Resident Form), is due on or before April 20, 2020. For

information and guidance in its preparation, we have helpful publications and other instructions on our

website at tax.hawaii.gov. Need more assistance? Do not hesitate to telephone, write, or visit any of

our six ofﬁ ces below:

Oahu 830 Punchbowl Street, Honolulu, HI 96813-5094 Phone: 808-587-4242

Maui 54 S. High Street, #208, Wailuku, HI 96793-2198 Phone: 808-984-8500

Molokai 35 Ala Malama Street, #101, Kaunakakai, HI 96748 Phone: 808-553-5541

Hawaii 75 Aupuni Street, #101, Hilo, HI 96720-4245 Phone: 808-974-6321

Kona 82-6130 Mamalahoa Hwy, #8, Captain Cook, HI 96704 Phone: 808-323-4597

Kauai 3060 Eiwa Street, #105, Lihue, HI 96766-1889 Phone: 808-274-3456

To better assist you, always keep a copy of your return, worksheets, and supporting documents in

your possession; we can help you understand and resolve problems more quickly if you have your tax

return information in front of you. Keeping a copy will also help you in preparing the following year’s

tax return.

Thank you for helping us provide more efﬁ cient service.

RONA M. SUZUKI

Director of Taxation

DUE DATE: APRIL 20, 2020

Make your check payable to the

“Hawaii State Tax Collector”

For more information, see page 30

of the Instructions.

State of Hawaii

Department of Taxation

P.O. Box 3559

Honolulu, Hawaii 96811-3559

PRSRT STD

U.S. Postage

PAID

Honolulu, Hawaii

Permit No. 481

E-ﬁ le Form N-11!

E-ﬁ le Form N-11 through Hawaii

Tax Online, the Department’s

website. For more information, go to

hitax.hawaii.gov

E-ﬁ le Form N-11 and federal Form

1040 using approved tax preparation

software or authorized tax

professionals. For more information,

go to tax.hawaii.gov

Clear Form

Page 2

Changes to Note

• Form N-1, Declaration of Estimated Income Tax for Individuals, and Form N-101A, Individual Income Tax Extension Payment Voucher, are obsolete.

Use F

orm N-200V, Individual Income Tax Payment Voucher, to make estimated tax and extension payments.

• Hawaii adopted the federal provisions that provide tax beneﬁ ts for investments in qualiﬁ ed opportunity zones, but limits those beneﬁ ts to investments

in qualiﬁ ed opportunity zones in Hawaii, effective for taxable years beginning after December 31, 2018. (Act 69, SLH 2019)

• Alimony received is no longer included in the income of the payee and alimony payments are no longer deductible by the payor for divorce decrees,

separation agreements, and certain modiﬁ cations executed after December 31, 2018. (Act 27, SLH 2018)

• All taxpayers are subject to the 10% threshold for the itemized deduction for medical expenses, effective for taxable years beginning after December

31, 2018. (Act 27, SLH 2018)

• Taxpayers may exclude up to $6,735 of their military reserve or Hawaii National Guard duty pay from their income, effective for taxable years

beginning after December 31, 2018. (Act 197, SLH 2004)

• The annual cap for the Motion Picture, Digital Media, and Film Production Income Tax Credit is increased to $50,000,000, effective for taxable years

beginning after December 31, 2018. (Act 275, SLH 2019)

• The Healthcare Preceptor Income Tax Credit is a new nonrefundable credit equal to $1,000 for each volunteer-based supervised clinical training

rotation supervised by the taxpayer, up to a maximum of $5,000 per taxable year, effective for taxable years beginning after December 31, 2018. (Act

43, SLH 2018)

• The Tax Credit for Research Activities is amended by extending the credit through 2024, allowing the credit to be claimed for all qualiﬁ ed research

expenses incurred in Hawaii without regard to the amount of expenses for previous years (base amount), and imposing an annual cap of $5,000,000,

effective for taxable years beginning after December 31, 2019. (Act 261, SLH 2019)

• The Historic Preservation Income Tax Credit is a new nonrefundable credit for taxable years 2020 to 2024 for substantial rehabilitation of a certiﬁ ed

historic structure. (Act 267, SLH 2019)

• The Ship Repair Industry Tax Credit is a new nonrefundable credit for taxable years 2022 to 2026 for the construction of a new drydock at Pearl

Harbor for use by the United States Navy. (Act 260, SLH 2019)

Important Reminders

File and Pay on Time

•

Please ﬁ le your return and pay your taxes by April 20, 2020.

• When you mail your return:

(1) Mail it to the appropriate address as stated in “Where to File.”

(2) Enclose only one return per envelope.

(3) Use proper postage. If there is insufﬁ cient postage on the envelope, the U.S. Postal Service will return it to you.

• Keep a copy of your return for your records.

Extension of Time to File

• If you are unable to ﬁ le by April 20, 2020, you are granted an automatic 6-month extension of time to ﬁ le your return through October 20, 2020. You

do not have to ﬁ le a form to request an extension. The extension of time to ﬁ le is not an extension of time for payment of tax.

(1) If you are due a refund, just ﬁ le your return by October 20, 2020.

(2) If you have a balance due, you must pay your taxes in full by April 20, 2020. File Form N-200V with your payment. You may not use federal Form

4868 instead of Form N-200V.

(3) If you’re not sure if you have a balance due, use the worksheet in “When to File.”

Make Sure Your Tax Return is Correct and Complete

• You can avoid processing delays, adjustments to your return, and additional correspondence from the Department of Taxation if you:

(1) Make sure all social security numbers are correct.

(2) Check the appropriate ﬁ ling status box.

(3) Complete all required entries on your return. The following lines must be ﬁ lled in: Form N-11, line 24; and Form N-15, line 41.

(4) Check the arithmetic on your return.

(5) Attach all required forms and statements.

(6) Attach your employee earning statements (HW-2s or federal W-2s) to the front of your return.

(7) Sign your return. If you paid someone to prepare your return, the preparer must sign and complete the Paid Preparer’s Information box.

• You may be required to ﬁ le an amended return to complete missing entries or provide missing forms or statements.

Amended Returns

• If you are ﬁ ling an amended return, you must submit a complete return and attach Schedule AMD along with all required forms and statements. If

you are claiming any tax credits, remember to attach the required forms, such as Schedule CR and Schedule X, even if you claimed the credits on

the original return. See “Make Sure Your Tax Return is Correct and Complete” above.

Married Taxpayers

• If you are married, print your spouse’s social security number in the designated area on your return whether a joint or separate return is ﬁ led.

• If your spouse is an alien and was issued an ITIN by the IRS, enter your spouse’s ITIN. If your spouse has applied for an ITIN but the IRS has not yet

issued the ITIN, write “Applied For.”

• If you are married and ﬁ ling separate returns, the refund from your spouse’s return cannot be applied to your liability.

Page 3

STATE OF HAWAII — DEPARTMENT OF TAXATION

RELATED FEDERAL/HAWAII TAX FORMS

Copy of

Fed. Form

Federal Comparable May Be

Form Number Title or Description of Federal Form Hawaii Form Submitted+

W-2 ......................Wage and Tax Statement ...................................................................................................................... HW-2 .................... Yes

W-4 ......................Employee’s Withholding Allowance Certiﬁ cate ...................................................................................... HW-4 .................... No

W-10 ....................Dependent Care Provider’s Identiﬁ cation and Certiﬁ cation ................................................................... HW-16 .................. No

461.......................Limitation on Business Losses .............................................................................................................. None .................... Yes

1040.....................U.S. Individual Income Tax Return ......................................................................................................... None .................... No

1040-SR ..............U.S. Tax Return for Seniors ................................................................................................................... None .................... No

1040 Sch A ..........Itemized Deductions .............................................................................................................................. None .................... No

Sch B ...................Interest and Ordinary Dividends ............................................................................................................ None .................... No

Sch C ...................Proﬁ t or Loss From Business ................................................................................................................ None .................... Not Required

Sch C-EZ .............Net Proﬁ t From Business ....................................................................................................................... None .................... Not Required

Sch D ...................Capital Gains and Losses ..................................................................................................................... None .................... No

Sch E ...................Supplemental Income and Loss ............................................................................................................ None .................... Not Required

Sch F ...................Proﬁ t or Loss From Farming .................................................................................................................. None .................... Not Required

Sch J ....................Income Averaging for Farmers and Fishermen ..................................................................................... N-168 ................... No

Sch R ...................Credit for the Elderly or the Disabled ..................................................................................................... None .................... No

1040-ES ...............Estimated Tax for Individuals ................................................................................................................. None .................... No

1040NR ...............U.S. Nonresident Alien Income Tax Return ........................................................................................... None .................... No

1040-V .................Payment Voucher................................................................................................................................... N-200V................. No

1040X ..................Amended U.S. Individual Income Tax Return ........................................................................................ None .................... No

1045.....................Application for Tentative Refund ............................................................................................................ N-109 ................... No

1128.....................Application To Adopt, Change, or Retain a Tax Year.............................................................................. None .................... Yes

1310.....................Statement of Person Claiming Refund Due a Deceased Taxpayer ....................................................... N-110 ................... No

2106.....................Employee Business Expenses .............................................................................................................. None .................... Yes*

2106-EZ ...............Unreimbursed Employee Business Expenses ....................................................................................... None .................... Yes*

2120.....................Multiple Support Declaration ................................................................................................................. None .................... Yes

2210.....................Underpayment of Estimated Tax by Individuals, Estates, and Trusts .................................................... N-210 ................... No

2441.....................Child and Dependent Care Expenses ................................................................................................... Sch X ................... No

2848.....................Power of Attorney and Declaration of Representative ........................................................................... N-848 ................... No

3115.....................Application for Change in Accounting Method....................................................................................... None .................... Yes

3903.....................Moving Expenses .................................................................................................................................. N-139 ................... No

4562.....................Depreciation and Amortization .............................................................................................................. None .................... Yes

4684.....................Casualties and Thefts ............................................................................................................................ None .................... Yes*

4797.....................Sales of Business Property ................................................................................................................... Sch D-1 ................ No

4835.....................Farm Rental Income and Expenses ...................................................................................................... None .................... Yes

4852.....................Substitute for Form W-2, Wage and Tax Statement, or Form 1099-R, Distributions From

Pensions, Annuities, Retirement or Proﬁ t-Sharing Plans, IRAs, Insurance Contracts, etc. ............ L-15 ..................... No

4868.....................Application for Automatic Extension of Time To File U.S. Individual Income Tax Return ....................... None .................... No

4952.....................Investment Interest Expense Deduction ................................................................................................ N-158 ................... No

4970.....................Tax on Accumulation Distribution of Trusts ............................................................................................ N-405 ................... No

4972.....................Tax on Lump-Sum Distributions ............................................................................................................ N-152 ................... No

5213.....................Election To Postpone Determination as To Whether the Presumption Applies That an

Activity Is Engaged in for Proﬁ t ....................................................................................................... None .................... Yes

5329.....................Additional Taxes on Qualiﬁ ed Plans (Including IRAs) and Other Tax-Favored Accounts....................... None .................... No

5884.....................Work Opportunity Credit ........................................................................................................................ N-884 ................... No

6198.....................At-Risk Limitations ................................................................................................................................. None .................... Yes

6252.....................Installment Sale Income ........................................................................................................................ None .................... Yes

6781.....................Gains and Losses From Section 1256 Contracts and Straddles ........................................................... None .................... Yes

8283.....................Noncash Charitable Contributions ......................................................................................................... None .................... Yes

8332.....................Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent .......................... None .................... Yes

8582.....................Passive Activity Loss Limitations ........................................................................................................... None .................... Yes

8586.....................Low-Income Housing Credit .................................................................................................................. N-586 ................... No

8615.....................Tax for Certain Children Who Have Unearned Income ......................................................................... N-615 ................... No

8814.....................Parents’ Election To Report Child’s Interest and Dividends ................................................................... N-814 ................... No

8824.....................Like-Kind Exchanges ............................................................................................................................. None .................... Yes

8829.....................Expenses for Business Use of Your Home ............................................................................................ None .................... Yes

8853.....................Archer MSAs and Long-Term Care Insurance Contracts ...................................................................... None .................... No

8949.....................Sales and Other Dispositions of Capital Assets .................................................................................... None .................... Yes

+If “Yes” is indicated and there is no Hawaii equivalent form, the federal form must be used.

*Use the 2017 federal form when ﬁ ling the 2019 Form N-11 or Form N-15.

You may obtain tax forms through the Department of Taxation’s website at tax.hawaii.gov.

To request tax forms by mail, you may call 808-587-4242 or toll-free 1-800-222-3229.

Page 4

Form N-11 —

General Instructions

Guidelines for Filling in

Scannable Forms

Form N-11 and Schedule CR are designed

for electronic scanning that permits faster

processing with fewer errors. To avoid delays:

• Print amounts only on those lines that are

applicable.

• Use only a black or dark blue ink pen. Do

not use red ink, pencils, felt tip pens, or

erasable pens.

• Because this form is read by a machine, print

your numbers inside the boxes like this:

1234567890x

• Do NOT print outside the boxes.

•

Fill in ovals completely. Do not 4 or 8

the ovals.

• Do NOT enter cents. For numbers that are

required to be rounded to the nearest dol-

lar, do NOT print over the zeros printed on

the form that are used to designate cents.

• Do NOT use dollar signs, slashes, dashes,

or parentheses in the boxes.

• Do NOT photocopy this form.

• Please use a color printer and print in

color.

Same-Sex Marriage

Effective December 2, 2013, Hawaii recog-

nizes marriages between individuals of the

same sex. As it relates to taxation, all same-

sex couples that are legally married in Hawaii

or any other jurisdiction where such marriag-

es are valid are married for all tax purposes,

including Hawaii income tax purposes.

Note: The federal government recognizes

marriages between individuals of the same

sex for federal income tax purposes.

Civil Unions

Effective January 1, 2012, civil unions are

ecognized in Hawaii. Civil unions entered into

in a jurisdiction other than Hawaii are also rec-

ognized, provided that the relationship meets

Hawaii’s eligibility requirements, has been en-

tered into in accordance with the laws of the

other jurisdiction, and can be documented.

The Internal Revenue Code (IRC) provi-

sions referred to in Hawaii’s Income Tax Law

that apply to a husband and wife, spouses, or

person in a legal marital relationship shall be

deemed to apply to partners in a civil union

with the same force and effect as if they were

“husband and wife,” “spouses,” or other

terms that describe persons in a legal marital

relationship. Accordingly, references to “mar-

ried” and “spouse” are also references to “in a

civil union” and “civil union partner,” respec-

tively.

For Hawaii income tax purposes, civil union

couples have the same tax filing status options

as married couples. Also, if an employee bene-

fit is tax-exempt when extended to the opposite

sex spouse of an employee, or to the children of

the spouse, the benefit is tax-exempt when ex-

tended to a civil union partner of an employee,

or to the children of the civil union partner.

Note: Individuals who have entered into a

registered domestic partnership, civil union,

or other similar relationship that is not consid-

ered a marriage under state (or foreign) law

are not considered married for federal income

tax purposes. Since the federal government

does not recognize civil unions as married

individuals for federal income tax purposes,

civil unions will continue to file as unmar-

ried individuals on their federal income tax

returns. Also, the income reported for federal

and for Hawaii income tax purposes may dif-

fer, depending on the situation. For example,

certain employee benefits that are tax-exempt

when provided to married couples and the

children of married couples may be taxable

federally when they are provided for civil

union partners and their children, unless the

civil union partner or their children qualify as

dependents under IRC section 152.

Who Must File

1. Every individual doing business in Ha-

aii during the taxable year must file a re-

turn, whether or not the individual derives

any taxable income from that business.

“Doing business” includes all activities en-

gaged in or caused to be engaged in with the

object of gain or economic benefit, direct or

indirect, except personal services performed

as an employee under the direction and con-

trol of an employer.

For example, every person receiving rents

from property owned in Hawaii is “doing

business” and must file a return whether or

not the person’s expenses exceed the gross

rental income.

2. Every individual receiving more than the

following amounts of gross income subject

to taxation under Hawaii Income Tax Law,

including amounts received as salaries and

wages for services rendered by an employee

to an employer, must file a return:

For Individuals Under Age 65

Filing Status Gross Income of

Married ﬁ ling separately $3,344

Single $3,344

Head of household $4,356

Qualifying widow(er) $5,544

Married ﬁ ling jointly $6,688

For Individuals Age 65 or older

Filing Status Gross Income of

Married ﬁ ling separately $4,488

Single $4,488

Head of household $5,500

Qualifying widow(er) $6,688

Married ﬁ ling jointly,

one is 65 or older $7,832

Married ﬁ ling jointly,

both are 65 or older $8,976

These threshold amounts will be higher

for persons who are blind, deaf, or totally

disabled, and who have completed and filed

a certification with the Department of Taxa-

tion (Department) of their disability on Form

N-172 before filing their income tax return.

For individuals who can be claimed as de-

pendents on the tax return of another taxpay-

er, the threshold amount is the amount of the

dependents’ standard deduction.

For nonresident aliens, the threshold

amount is $1,144 for individuals under 65, and

$2,288 for individuals 65 or older.

For nonresident individuals, the threshold

amounts stated above must be multiplied by

the ratio of Hawaii adjusted gross income to

total adjusted gross income from all sources

to determine whether the individual must file

a return.

3. Children who receive unearned income

during the taxable year and have not attained

the age of 14 years before the end of the tax-

able year must file their own returns to report

their income unless their parent or parents

report that income.

However, the Department will, administra-

tively, not require the filing of a State income

tax return if the child’s total earned and/or

unearned income for the taxable year is $500

or less and the application of the standard de-

duction amount results in no taxable income

for the child. Children who must file a return

may need to file Form N-615, Computation

of Tax for Children Under Age 14 Who Have

Unearned Income of More than $1,000. Par-

ents may report income of their children by

filing Form N-814, Parent’s Election to Report

Child’s Interest and Dividends.

4. If you need to report additional tax from

Form N-2, Distribution from an Individual

Housing Account; Form N-103, Sale of Your

Home; Form N-152, Tax on Lump-Sum Dis-

tributions; Form N-312, Recapture of Capital

Goods Excise Tax Credit; Form N-338, Re-

capture of Tax Credit for Flood Victims; Form

N-344, Recapture of Important Agricultural

Land Qualified Agricultural Cost Tax Credit;

Form N-348, Recapture of Capital Infrastruc-

ture Tax Credit; Form N-405, Tax on Accumu-

lation Distribution of Trusts; Form N-586, Re-

capture of Tax Credit for Low-Income Hous-

Page 5

ing; or Form N-814, Parent’s Election to Re-

port Child’s Interest and Dividends, then you

must file a return regardless of income level.

Who Should File

Even if you do not have to file, you should

file to get a refund if too much income tax was

withheld from your pay. Also, if you are eli-

gible for refundable credits, you need to file a

return to claim the credits.

Residency Status

Resident

resident is taxed on income from all

sources.

A resident must file an Individual Income

Tax Return—Resident (Form N-11), if re-

quired to do so.

A Hawaii resident is (1) Every individual

domiciled in Hawaii, and (2) Every other in-

dividual whether domiciled in Hawaii or not,

who resides in Hawaii for other than a tempo-

rary or transitory purpose.

An individual domiciled outside Hawaii is

presumed to be a resident if he or she spends

more than 200 days in Hawaii during the tax-

able year. This presumption may be overcome

by evidence satisfactory to the Department

that the individual maintained a permanent

place of abode outside the State and was in the

State for a temporary or transitory purpose.

No person shall be deemed to have gained

or lost a residence simply because of his or

her presence or absence in compliance with

military or naval orders of the United States,

while engaged in aviation or navigation, or

while a student at any institution of learning.

See Tax Information Release No. 97-1, “Deter-

mination of Residence Status.”

Nonresident

A Hawaii nonresident is an individual who

is in Hawaii for a temporary or transient pur-

pose, and whose permanent domicile is not

Hawaii.

A nonresident must file an Individual In-

come Tax Return—Nonresident and Part-Year

Resident (Form N-15), if required to do so. A

nonresident will be taxed on income from Ha-

waii sources only.

A nonresident married to a Hawaii resi-

dent may choose to file a joint return with the

resident spouse on Form N-11; however, the

nonresident will then be taxed on all income

from all sources. For more information, see

Married Filing Joint Return on page 8.

Part-Year Resident

A part-year resident is an individual who

was a Hawaii resident for part of the year, and

who was a nonresident during the other part

of the year. This includes those who moved to

Hawaii during the year and those who moved

away from Hawaii during the year.

A part-year resident must file an Individual

Income Tax Return—Nonresident and Part-

Year Resident (Form N-15), if required to do

so. A part-year resident will be taxed on all

income from all sources during the period of

residency, and on income from Hawaii sourc-

es only during the period of nonresidency.

Domicile Deﬁ ned

The term “domicile” means the place where

an individual has a true, fixed, permanent

home and principal establishment, and to

which place the individual has, whenever ab-

sent, the intention of returning. It is the place

in which an individual has voluntarily fixed

the habitation of himself or herself and family,

not for a mere special or temporary purpose,

but with the present intention of making a

permanent home. Three things are necessary

to create a new domicile: first, abandonment

of the old domicile; second, the intent to estab-

lish a new domicile; and third, actual physical

presence in the new domicile. Once a domicile

is established, the intent to abandon it is not it-

self sufficient to create a new domicile; a new

domicile must be shown.

Reminder: If you are in Hawaii because of

military orders and do not intend to make Ha-

waii your permanent home, you are not con-

sidered a Hawaii resident for income tax pur-

poses, even though you have been in Hawaii

for more than 200 days in 2019. File a resident

return with your home state, and file a Hawaii

nonresident and part-year resident return

(Form N-15) to report your Hawaii income.

Resident and Nonresident

Examples

Note: For more information, see Tax Infor-

mation Release No. 90-3, “Income Taxation

and Eligibility for Credits of an Individual

Taxpayer Whose Status Changes from Resi-

dent to Nonresident or from Nonresident to

Resident,” Tax Information Release No. 90-

10, “Clarification of Taxation and the Eligi-

bility for Personal Exemptions and Credits of

Residents and Nonresidents in the Military

and Spouses and Dependents of Persons in

the Military,” Tax Information Release No. 97-

1, “Determination of Residence Status,” Tax

Information Release No. 2010-01, “Military

Spouses Residency Relief Act (“MSRRA”),”

and Department of Taxation Announcement

No. 2019-01, “Military Spouses Residency Re-

lief Act; Amendments to the Servicemembers

Civil Relief Act enacted December 31, 2018;

Tax Information Release No. 2010-01.”

Example 1—A Hawaii resident who enlists

in the military normally will remain a Hawaii

resident regardless of the length of absence

from Hawaii while stationed outside of Ha-

waii.

Example 2—A Hawaii resident working in a

foreign country will remain a Hawaii resident

unless permanent resident status is granted

by the foreign country.

Example 3—Foreign students who are

granted entry into the United States on “F” vi-

sas are nonresidents for Hawaii tax purposes.

Researchers and faculty members who are

granted entry into the United States on “H,”

“J,” or “Q” visas, and who have been in Ha-

waii for more than 200 days during the taxable

year may be considered Hawaii residents.

Example 4—Spouses of those in the mili-

tary service do not become Hawaii residents

if their principal reason for moving to Hawaii

was the transfer of the service member spouse

to Hawaii, and if it is their intention to leave

Hawaii when the service member spouse ei-

ther is transferred to another military station

or leaves the service.

Example 5—A Hawaii resident who marries

a nonresident will remain a Hawaii resident

unless the three requirements for changing

his or her domicile are also met. (Refer to

“Domicile Defined” on this page.) This situ-

ation applies in reverse to a nonresident who

marries a resident. A person’s residence sta-

tus will not change just because of marriage.

Which Form to File

You MUST use Form N-11 if:

•

You were a resident for the full year, or, if

married filing jointly, either spouse was

a resident for the full year (however, the

nonresident spouse would be taxed on their

worldwide income for the full year).

You MUST use Form N-15 if:

• You were a nonresident for the full year, or,

if married filing jointly, both spouses were

nonresidents for the full year.

• You are taking up residence in Hawaii dur-

ing the tax year. (Part-year resident).

• You are giving up residence in Hawaii dur-

ing the tax year. (Part-year resident).

When to File

Note: If any due date falls on a Saturday,

Sunday, or legal holiday, use the next regular

workday as the due date.

You should file as soon as you can after Jan-

uary 1, but not later than April 20, 2020. If you

file late, you may have to pay penalties and in-

terest if you owe taxes on your return. Please

see the instructions for Penalties and Interest

on page 33. If you cannot meet the deadline,

you are automatically granted a 6-month ex-

tension without the need to file anything with

the Department unless an additional tax pay-

ment must be made. As long as the following

conditions are met, you are deemed to have

made an application for the 6-month exten-

sion to file an income tax return on the pre-

scribed due date:

1. On or before April 20, 2020, 100% of the

properly estimated tax liability is paid;

2. The tax return is filed on or before the ex-

piration of the 6-month extension period;

3. The tax return is accompanied by full pay-

ment of any tax not already paid; and

4. A court has not ordered you to file the tax

return on or before the prescribed due

date.

Properly estimated tax liability means you

made a bona fide and reasonable attempt to

locate and gather all of the necessary informa-

tion to make a proper estimate of tax liability

for the taxable year.

Page 6

You may use the below worksheet to deter-

mine the amount of your income tax balance

due.

1. Amount of income tax you

expect to owe for the taxable

year. If you do not expect to

owe tax, do not complete this

worksheet. ...............................

2. Hawaii income tax withheld .

3. Current year’s estimated

tax payments (include prior

year’s overpayment allowed

as a credit) ...............................

4. Other payments and tax

credits ......................................

5. Total (add lines 2, 3, and 4) ...

6. Income tax balance due

(line 1 minus line 5) ...............

You must pay the amount shown on line 6.

If you must make an additional payment

of tax on or before April 20, 2020 in order to

meet the condition requiring payment of 100%

of the properly estimated tax liability, file

Form N-200V with your payment. The exten-

sion of time to file is not an extension of time

for payment of tax.

Form N-200V can be filed and payment

made electronically through the State’s In-

ternet portal. Go to tax.hawaii.gov/eservices/

for more information. Federal Form 4868, Ap-

plication for Automatic Extension of Time To

File U.S. Individual Income Tax Return, may

not be used in lieu of Form N-200V.

Note: Returns for fiscal year taxpayers must

be filed on or before the 20th day of the fourth

month following the close of the fiscal year.

Note: Under Hawaii Income Tax Law, certain

tax credits must be claimed within 12 months

from the close of the tax year.

The official U.S. Post Office cancellation

mark will be considered primary evidence of

the date of filing of tax documents and pay-

ments. If you want to keep evidence that you

mailed your return on time, ask your Post

Office for a Certificate of Mailing. It is NOT

necessary to get a certified or registered mail

return receipt.

Hawaii has adopted the IRC provision to al-

low documents and payments delivered by a

designated private delivery service to qualify

for the “timely mailing treated as timely fil-

ing/paying rule.” The Department will con-

form to the Internal Revenue Service listing

of designated private delivery service and

type of delivery services qualifying under this

provision. Timely filing of mail which does not

bear the U.S. Post Office cancellation mark or

the date recorded or marked by the desig-

nated delivery service will be determined by

reference to other competent evidence. The

private delivery service can tell you how to

get written proof of the mailing date.

Where to File

If you are enclosing a check or money order

ith your tax return, mail your return with

payment to:

Hawaii Department of Taxation

Attn: Payment Section

P. O. Box 1530

Honolulu, Hawaii 96806-1530

If you are NOT enclosing a check or money

order with your tax return, mail your return

to:

Hawaii Department of Taxation

P. O. Box 3559

Honolulu, Hawaii 96811-3559

Where to Get Forms and

Information

Taxpayer Services Branch

Website: tax.ha

waii.gov

Telephone:

808-587-4242

Toll-Free: 1-800-222-3229

Telephone for the hearing impaired:

808-587-1418

Toll-Free: 1-800-887-8974

Other Information

Death of Taxpayer

Did the taxpayer die before filing a return

for 2019? If so, the taxpayer’s spouse or per-

sonal representative may have to file a return

and sign it for the person who died (decedent)

if the decedent was required to file a return.

A personal representative can be an executor,

administrator, or anyone who is in charge of

the taxpayer’s property.

If the decedent did not have to file a return

but either had State income tax withheld,

made estimated tax payments, or is eligible

for various tax credits, a return must be filed

to get a refund.

If your spouse died in 2019 and you did not

remarry in 2019, or if your spouse died in 2020

before filing a return for 2019, you may still

file a joint return for the 2019 tax year.

If a return is filed for a deceased taxpay-

er, including a joint return with a surviving

spouse, the Deceased oval must be filled in

and the date of death must be written in the

boxes provided.

Generally, the personal representative or

other responsible individual must sign the re-

turn on behalf of the decedent. If a refund is

due, Form N-110, Statement of Person Claim-

ing Refund Due a Deceased Taxpayer, must

be completed and attached to the return to

ensure that the refund check will be issued

in the name of the surviving spouse, personal

representative, or other responsible individu-

al instead of in the decedent’s name. A per-

sonal representative or other individual may

be required to attach other documents such

as the death certificate. See Form N-110 for

further information.

Exception for joint returns filed by sur-

viving spouse. If a joint return is being filed

by the decedent and the decedent’s spouse,

the spouse should write, “Filing as surviving

spouse,” on the signature line which the de-

cedent would have signed, and then the sur-

viving spouse should sign his or her name on

the other signature line. If a refund is being

claimed on the return, Form N-110 is not re-

quired. The refund check will be issued to the

surviving spouse.

Filing a Final Return

If you are giving up your Hawaii residency

t the end of the year, write the words “FINAL

RETURN” on the top middle of the return.

Estimated Tax Payments

Purpose. You must pay income taxes as you

earn income during the year, either through

withholding or by making estimated tax pay-

ments. You may have to make estimated tax

payments if the tax withheld from your salary

is not enough, or if you receive income that

is not subject to withholding, such as self-em-

ployment income, interest, dividends, rents,

and capital gains.

Who Must Make Estimated Tax Payments?

In most cases, you must pay estimated tax for

the current year if both of the following apply:

(1) You expect to owe at least $500 in tax for

the current year, after subtracting your with-

holding and credits. (2) You expect your with-

holding and credits to be less than the smaller

of: 60% of the tax to be shown on your current

year tax return, or 100% of the tax shown on

your tax return for the preceding year. Your

tax return for the preceding year must cover

all 12 months.

Note: If you did not file a tax return for the pre-

ceding year or that return did not cover all 12

months, the 100% of the tax shown on your tax

return for the preceding year does not apply.

Exceptions. You do not have to pay estimat-

ed tax for the current year if:

1. Your estimated tax liability (after taking

into account all taxes withheld or collected

at the source) for the taxable year is less

than $500; or

2. You meet all of the following conditions:

(1) You were a full-year Hawaii resident in

the preceding year, (2) You had no tax li-

ability for the preceding year, and (3) Your

tax year covered a 12-month period. You

had no tax liability for the preceding year

if your total tax was zero or you were not

required to file an income tax return.

Note: If you were a nonresident or a part-year

resident in the preceding year, you do not meet

the exception under number 2.

Due Dates for Estimated Tax Payments.

You can pay all of your estimated tax by April

20, 2020, or in four equal amounts by April

20, 2020, June 22, 2020, September 21, 2020,

and January 20, 2021. Each payment must

be submitted with Form N-200V, Individual

Income Tax Payment Voucher. Form N-200V

can be filed and payment made electronically

through the State’s Internet portal. For more

information, go to tax.hawaii.gov/eservices/.

Penalties. You may be charged a penalty

(interest on the underpayment of estimated

tax) if you do not pay enough tax through

withholding and estimated tax payments, or

if your estimated tax payments are late. See

Penalties and Interest on page 33.

Page 7

For more information, see Tax Facts 2019-

03, “Estimated Income Tax for Individuals.”

Multistate Tax Compact Act

Any taxpayer, other than a corporation act-

ing as a business entity in more than one state,

who is required by Hawaii Income Tax Law to

file a return and whose only activities in the

State consist of sales and who does not own

or rent real estate or tangible personal prop-

erty and whose annual gross sales in or into

the State during the tax year are not in excess

of $100,000, may elect to report and pay a tax

of .5 percent of such annual gross sales. Tax-

payers who elect the foregoing shall file Form

N-310 in lieu of Form N-11.

Special Instructions for

Nonresident Aliens

In certain situations, a taxpayer may be

onsidered a nonresident alien for federal in-

come tax purposes and a resident for Hawaii

income tax purposes. In these situations, the

special rules applicable to individuals who

are considered nonresident aliens for federal

income tax purposes will apply when the in-

dividual files a Hawaii resident income tax

return. See Tax Information Release No. 97-1,

“Determination of Residence Status.”

Steps for Preparing Your

Return

These instructions consist of 12 steps. You

should complete the first 3 steps that follow

BEFORE you begin to fill in your return.

Steps 4 and 5, filling in the return through

line 6e, begin on this page and end on page

11. Step 6, filling in the rest of the return, is

on page 11. The Line-By-Line Instructions for

Form N-11 begin on page 12 and end on page

32.

Finally, steps 7 through 12 begin on page 32.

These are the steps you should take after your

Form N-11, and other schedules and forms

you need, are filled in.

If you follow these steps and read the Line-

By-Line Instructions, we feel you can fill in

your return quickly and accurately. If you

have any questions, call our Taxpayer Ser-

vices staff.

Step 1

Get all of y

our income

records together.

These include any Forms HW-2 and federal

Forms W-2 or 1099 that you received. If you

don’t receive a Form HW-2 or federal Form

W-2 by January 31, or if the one you get isn’t

correct, please contact your employer as soon

as possible. Only your employer can give you

a Form HW-2 or federal Form W-2, or correct

it. If you cannot get a Form HW-2 or federal

Form W-2 by February 15, please contact our

Taxpayer Services staff.

If you have someone prepare your return

for you, make sure that person has all your

income and expense records so he or she can

fill in your return correctly. Remember, even

if someone else prepares your return incor-

rectly, YOU are still responsible.

Step 2

If y

ou plan to claim tax credits

or itemize deductions, get

the information and expense

records you need.

These instructions tell you what credits and

deductions you can claim. Some of the records

you may need are:

• Medical and dental payment records.

• Real estate and income tax receipts.

• Interest payment records for a home mort-

gage.

• Receipts for charitable contributions.

Step 3

Get all f

orms, instructions,

and publications you need.

All forms, instructions, and publications you

need are available on the Internet. You may

also pick them up at any district tax office or

request that they be mailed to you. Please al-

low approximately 10 days for the mailing of

the tax forms. See page 6 for Department’s

website address and phone number.

Step 4

Fill in the oval(s) if you are

ﬁ ling an amended return.

If you are filing an amended return, fill in

he amended return oval at the top of Form

N-11.

If you are filing an amended return due to a

farming net operating loss carryback, also fill

in the NOL Carryback oval.

If you are filing an amended return due to

an IRS adjustment, also fill in the IRS Adjust-

ment oval.

See page 33 of the instructions for more in-

formation.

Step 5

Fill in your tax year, ﬁ rst time

ﬁ ler oval, name, address,

social security number, ﬁ ling

status, and exemptions.

Tax Year, First Time Filer

If you are filing your return on a fiscal year

basis, you must fill in the dates that your fiscal

year begins and ends.

If you are filing a tax return for the first

time, fill in the “First Time Filer” oval at the

top of Form N-11.

Name

Write your name, and your spouse’s name

if you are married and filing a joint return,

in the space provided and at the top of Form

N-11, pages 2, 3, and 4. You must use your

legal name. Nicknames are not permitted. If

you have changed your name because of mar-

riage, divorce, etc., make sure you immediate-

ly notify the Social Security Administration so

that the name on your tax return is the same

as the name on the social security records. If

these names do not match, your refund may

be delayed.

If you file joint returns, write the names in

the same order every year.

Write any descriptions (e.g., Jr., III, etc.) in

the space provided for the suffix.

You must also write the first four letters of

your last name in the boxes provided. If you

are married, you must also write the first four

letters of your spouse’s last name in the boxes

provided whether joint or separate returns

are filed.

Address

Write your current mailing address in the

space provided. If you receive your mail “in

care of” someone else (i.e., your mail is sent

to an address belonging to someone other

than yourself), fill in that person’s name in the

space provided.

If your address is outside the United States

or its possessions or territories, enter the

city in the space provided for “City, town or

post office,” and enter the postal code in the

space provided for “Postal/ZIP code.” Enter

the province and/or state, and the name of the

country in the space provided. Do not abbre-

viate the country name.

If your mailing address has changed, you

must notify the Department of the change

by completing Form ITPS-COA, Change of

Address Form, or log in to your Hawaii Tax

Online account at hitax.hawaii.gov. Failure to

do so may prevent your address from being

updated, any refund due to you from being de-

livered (the U.S. Postal Service is not permit-

ted to forward your State refund check), and

delay important notices or correspondence to

you regarding your return.

Social Security Number

Write your social security number in the

space provided. If you are married, you must

also write your spouse’s social security num-

ber in the space provided whether joint or

separate returns are filed. Your social securi-

ty numbers must be written in the same order

as your names are written on your return.

Also enter your social security number, and

your spouse’s social security number if you

are married and filing a joint return, at the top

of Form N-11, pages 2, 3, and 4.

If you are an alien and was issued an indi-

vidual taxpayer identification number (ITIN)

by the IRS, enter your ITIN in the space pro-

vided for the social security number. If you

have applied for an ITIN but the IRS has not

yet issued the ITIN, write “ITIN Applied For”

in the space below the “THIS SPACE RE-

SERVED” box.

Filing Status

Fill in oval 1, 2, 3, 4, or 5 as appropriate. Fill

in only one oval.

Page 8

Note: Civil union couples have the same tax

filing status options as married couples.

Note: More than one filing status may apply to

you. Choose the one that will give you the low-

est tax. Your Hawaii filing status may or may

not be the same as your federal filing status.

Single

Note: Civil union couples may not choose

“single” as their filing status.

You can fill in oval 1 if any of the following

was true on December 31, 2019.

• You were never married.

• You were legally separated according to

your state’s law under a decree of divorce

or separate maintenance. But if, at the end

of 2019, your divorce was not final (an in-

terlocutory decree), you are considered

married and cannot fill in oval 1.

• You were widowed before January 1, 2019,

and did not remarry before the end of 2019.

If you have a child, you may be able to use

the qualifying widow(er) filing status. See

Qualifying Widow(er) on page 9.

If you are unmarried and provide a home for

certain other persons, you may be able to file

as Head of Household. See Head of Household

on this page.

Married Filing Joint Return

You can fill in oval 2 if any of the following

apply.

• You were married at the end of 2019, even

if you did not live with your spouse at the

end of 2019.

• Your spouse died in 2019 and you did not

remarry in 2019.

• You were married at the end of 2019, and

your spouse died in 2020 before filing a

2019 return.

If you are married and file a joint return,

both you and your spouse must report all of

your income, exemptions, deductions, and

credits on your joint return. You can file a

joint return even if only one of you had income

or if you did not live together all year. How-

ever, both of you must sign the return.

If you file a joint return, both you and your

spouse are generally responsible for the tax,

interest, and penalties due on the return. This

means that if one spouse does not pay the tax

due, the other may have to.

Note: If you and your spouse file a joint return

for the year and later decide to file separately,

both you and your spouse MUST file amended

returns on or before the due date of the origi-

nal return (April 20). You may not change

your filing status from married filing jointly to

married filing separately after that date.

If your spouse died in 2019 or in 2020 before

filing a return for 2019, see Death of Taxpayer

on page 6.

Special Rule for Nonresidents or Part-Year

Residents Who File a Joint Return With a Ha-

waii Resident on Form N-11. If at the end of

the taxable year you were a nonresident (but

you were a U.S. resident) or a part-year resi-

dent who is married to a full-year Hawaii resi-

dent, you may choose to file a joint return with

your resident spouse. By filing a joint return,

however, you and your spouse will be taxed

on your combined worldwide income for the

entire year.

Special Rule for Nonresidents or Part-Year

Residents Who File a Joint Return With a Part-

Year Resident on Form N-15. If at the end of

the taxable year you were a nonresident (but

you were a U.S. resident) or a part-year resi-

dent who is married to a part-year resident,

you may choose to file a joint return with your

part-year resident spouse. By filing a joint

return, you and your spouse will be taxed on

your combined worldwide income for the pe-

riod in which the part-year resident is a Ha-

waii resident.

Special Rule for Nonresident Aliens and Du-

al-Status Aliens. Generally, a married couple

cannot file a joint return if either spouse is a

nonresident alien at any time during the year.

However, if you were a nonresident alien or a

dual-status alien and were married to a U.S.

citizen or resident alien at the end of 2019, you

can elect to be treated as a resident alien and

file a joint federal return. See federal Publi-

cation 519 for details. If you and your spouse

have made that election on your federal re-

turn, you also may choose to file a joint Ha-

waii return. By filing a joint return, you and

your spouse will be taxed on your combined

worldwide income.

Note: For purposes of filing a joint return,

common law marriages are not recognized

under Hawaii law unless they began in a state

which permits common law marriages.

Married Filing Separate Return

If you are married and file a separate re-

turn, you generally report only your own in-

come, exemptions, deductions, and credits.

Generally, you are responsible only for the tax

on your own income.

However, you will usually pay more tax than

if you use another filing status for which you

qualify. Also, if you file a separate return, you

cannot take the student loan interest deduc-

tion or the earned income tax credit. You also

cannot take the standard deduction if your

spouse itemizes deductions.

If you file a separate return, write your

spouse’s full name in the space after oval

3. Also write the first four letters of your

spouse’s last name and your spouse’s social

security number in the boxes provided.

If your spouse does not file a Hawaii tax re-

turn, you may be able to claim the exemption

for your spouse. See the instructions for line 6b.

If you were married in 2019, had a child liv-

ing with you, and lived apart from your spouse

during the last six months of 2019, you may be

able to file as Head of Household. See Married

persons who live apart on page 9.

Special Rule for Nonresident Aliens and Du-

al-Status Aliens. Married nonresident aliens

must file separate returns. However, if you

were a nonresident alien or a dual-status alien

and were married to a U.S. citizen or resident

alien at the end of 2019, you can elect to be

treated as a resident alien and file a joint fed-

eral return. See federal Publication 519 for

details. If you and your spouse have made that

election on your federal return, you also may

choose to file a joint Hawaii return. By filing a

joint return, you and your spouse will be taxed

on your combined worldwide income.

Head of Household

Note: Since this filing status is for unmarried

individuals who provide a home for certain

other persons, a person in a civil union may

not choose “head of household” as their fil-

ing status. However, a person in a civil union

may file as “head of household” if the person

is considered unmarried because they lived

apart from their civil union partner for the last

six months of 2019 and they meet the other

rules under Married persons who live apart

on page 9.

This filing status is for unmarried individu-

als who provide a home for certain other per-

sons. You are considered unmarried for this

purpose if any of the following applies.

• You were legally separated according to

your state’s law under a decree of divorce

or separate maintenance at the end of 2019.

But if, at the end of 2019, your divorce was

not final (an interlocutory decree), you are

considered married.

• You are married but lived apart from your

spouse for the last six months of 2019 and

you meet the other rules under Married

persons who live apart on page 9.

• You are married to a nonresident alien at

any time during the year and you do not

choose to treat him or her as a resident

alien.

Fill in the oval on line 4 only if you are un-

married (or considered unmarried) and either

Test 1 or Test 2 applies.

Test 1. You paid over half the cost of keep-

ing up a home that was the main home for all

of 2019 of your parent whom you can claim as

a dependent, except under a multiple support

agreement (see page 11). Your parent did not

have to live with you.

Test 2. You paid over half the cost of keep-

ing up a home in which you lived and in which

one of the following also lived for more than

half of the year (if half or less, see Exception

to time lived with you on page 9).

1. Any person whom you can claim as a de-

pendent. But do not include:

a. Your child whom you claim as your

dependent because of the rule for

Children of divorced or separated

parents on page 10,

b. Any person who is your dependent

only because he or she lived with you

for all of 2019, or

c. Any person you claimed as a dependent

under a multiple support agreement.

See page 11.

2. Your unmarried qualifying child who is

not your dependent.

3. Your married qualifying child who is not

your dependent only because you can be

claimed as a dependent on someone else’s

2019 return.

Page 9

4. Your qualifying child who, even though

you are the custodial parent, is not your

dependent because of the rule for Chil-

dren of divorced or separated parents on

page 10.

If the child is not claimed as your depen-

dent, enter the child’s name on line 4.

Qualifying child. To find out if someone is

your qualifying child, see Step 1 of the line 6c

instructions on this page.

Dependent. To find out if someone is your

dependent, see the instructions for line 6c that

begin on this page.

Exception to time lived with you. Tempo-

rary absences by you or the other person for

special circumstances, such as school, vaca-

tion, business, medical care, military service,

or detention in a juvenile facility, count as

time lived in the home. Also see Kidnapped

child on page 11, if applicable.

If the person for whom you kept up a home

was born or died in 2019, you still may be able

to file as head of household. If the person is

your qualifying child, the child must have

lived with you for more than half the part of

the year he or she was alive. If the person is

anyone else, see federal Publication 501.

Keeping up a home. To find out what is in-

cluded in the cost of keeping up a home, see

federal Publication 501.

Special Rule for Nonresident Aliens and Du-

al-Status Aliens.—If you were a nonresident

alien or dual-status alien during the tax year,

you cannot file as Head of Household.

Married persons who live apart. Even if you

were not divorced or legally separated at the

end of 2019, you are considered unmarried if

all of the following apply.

• You lived apart from your spouse for the

last six months of 2019. Temporary ab-

sences for special circumstances, such

as for business, medical care, school, or

military service, count as time lived in the

home.

• You file a separate return from your

spouse.

• You paid over half the cost of keeping up

your home for 2019.

• Your home was the main home of your

child, stepchild, or foster child for more

than half of 2019 (if half or less, see Excep-

tion to time lived with you on this page).

• You can claim this child as your dependent

or could claim the child except that the

child’s other parent can claim him or her

under the rule for Children of divorced or

separated parents on page 10.

Adopted child. An adopted child is always

treated as your own child. An adopted child

includes a child lawfully placed with you for

legal adoption.

Foster child. A foster child is any child

placed with you by an authorized placement

agency or by judgment, decree, or other order

of any court of competent jurisdiction.

Special Rule for Nonresident Aliens and

Dual-Status Aliens.—If you were a nonresident

alien or dual-status alien during the tax year,

the special rules for Married persons who live

apart will not apply to you unless you meet all

of the tests previously stated, and you are a res-

ident of Canada or Mexico. If you are consid-

ered unmarried under these rules, you may file

as a single individual. You cannot file as Head

of Household.

Qualifying Widow(er)

You can fill in oval 5 and use joint return tax

rates for 2019 if all of the following apply.

• Your spouse died in 2017 or 2018 and you

did not remarry before the end of 2019.

• You have a child or stepchild (not a foster

child) whom you can claim as a dependent

or could claim as a dependent except that,

for 2019:

– The child had gross income of $4,200 or

more,

– The child filed a joint return, or

– You could be claimed as a dependent on

someone else’s return.

If the child isn’t claimed as your dependent

on line 6c, enter the child’s name on line 4.

• This child lived in your home for all of

2019. If the child did not live with you for

the required time, see Exception to time

lived with you, below.

• You paid over half the cost of keeping up

your home.

• You could have filed a joint return with

your spouse the year he or she died, even if

you did not actually do so.

If your spouse died in 2019, you cannot file

as qualifying widow(er). Instead, see the in-

structions for Married Filing Joint Return on

page 8.

Adopted child. An adopted child is always

treated as your own child. An adopted child

includes a child lawfully placed with you for

legal adoption.

Dependent. To find out if someone is your

dependent, see the instructions for line 6c that

begin on this page.

Exception to time lived with you. Tempo-

rary absences by you or the child for special

circumstances, such as school, vacation, busi-

ness, medical care, military service, or deten-

tion in a juvenile facility, count as time lived in

the home. Also see Kidnapped child on page

11, if applicable.

A child is considered to have lived with you

for all of 2019 if the child was born or died in

2019 and your home was the child’s home for

the entire time he or she was alive.

Keeping up a home. To find out what is in-

cluded in the cost of keeping up a home, see

federal Publication 501.

Note: See Death of Taxpayer on page 6 for

more information.

Special Rule for Nonresident Aliens and Du-

al-Status Aliens.—The special rules for Quali-

fying Widow(er) will not apply unless the sur-

viving spouse meets all of the tests previously

stated, and was a resident alien or U.S. citizen

the year their spouse died. The residency

status refers to the surviving spouse’s actual

status, and not the election that some nonresi-

dent aliens make to be taxed as U.S. residents.

Exemptions

Line 6a

Yourself

Fill in the oval on line 6a if no one can claim

you as a dependent on another person’s tax re-

turn. If you can be claimed as a dependent on

another person’s tax return, do not fill in the

oval on line 6a. Instead, fill in the oval above

line 21. Fill in the oval for “Age 65 or over” if

you are age 65 or over as of January 1, 2020.

Line 6b

Spouse

ill in the oval on line 6b if either of the fol-

lowing applies.

1. Your filing status is married filing jointly

and your spouse cannot be claimed as a de-

pendent on another person’s return.

2. You were married at the end of 2019, your

filing status is married filing separately,

and both of the following apply.

a. Your spouse had no income and is not fil-

ing a return.

b. Your spouse cannot be claimed as a de-

pendent on another person’s return.

If your spouse meets these qualifications,

fill in the oval under line 6b.

If you became divorced or legally separated

during 2019, you cannot take an exemption for

your former spouse.

Fill in the oval for “Age 65 or over” if your

spouse was age 65 or over as of January 1,

2020 and your filing status is married filing

jointly.

Death of your spouse. If your spouse died

in 2019 and you did not remarry by the end of

2019, fill in the ovals on line 6b for the exemp-

tions you could have taken for your spouse

on the date of death. See the instructions for

Death of Taxpayer on page 6.

Enter the number of ovals filled on lines 6a

and 6b.

Lines 6c and 6d

Children and Other Dependents

nter on lines 6c and 6d the full names, so-

cial security numbers, and relationship for

your dependent children and other depen-

dents. Each dependent must have a social

security number. If you have more than four

dependents, attach a statement with the re-

quired information. Enter the number of your

dependent children in the box for line 6c. En-

ter the number of other dependents in the box

for line 6d.

Follow the steps below to find out if a person

qualifies as your dependent.

Do You Have a Qualifying

Child?

A qualifying child is a child who is your:

• Son, daughter, stepchild, foster child,

brother, sister, stepbrother, stepsister, half

brother, half sister, or a descendant of any

Step 1

Page 10

of them (for example, your grandchild,

niece, or nephew), and

• Was under age 19 at the end of 2019 and

younger than you (or your spouse, if filing

jointly), or under age 24 at the end of 2019,

a student, and younger than you (or your

spouse, if filing jointly), or any age and

permanently and totally disabled, and

• Who did not provide over half of his or her

own support for 2019, and

• Who is not filing a joint return for 2019

or is filing a joint return for 2019 only to

claim a refund of withheld income tax or

estimated tax paid, and

• Who lived with you for more than half of

2019. If the child did not live with you for

the required time, see Exception to time

lived with you on page 11.

1. Do you have a child who meets the condi-

tions to be your qualifying child?

Yes. Go to Step 2.

No. Go to Step 3.

Is Your Qualifying Child

Your Dependent?

1. Was the child a U.S. citizen, U.S. national,

U.S. resident alien, or a resident of Canada

or Mexico? If the child was adopted, see Ex-

ception to citizen test on page 11.

Yes. Go to Question 2.

No. Stop. You cannot claim this child as a

dependent.

2. Was the child married?

Yes. See Married person on page 11.

No. Go to Question 3.

3. Could you, or your spouse if filing jointly,

be claimed as a dependent on someone

else’s 2019 tax return?

Yes. Stop. You cannot claim any depen-

dents. Go to Form N-11, line 7.

No. You can claim this child as a dependent.

Is Your Qualifying

Relative Your Dependent?

A qualifying relative is a person who is

your:

• Son, daughter, stepchild, foster child, or a

descendant of any of them (for example,

your grandchild), or

Brother, sister, half brother, half sister, or

a son or daughter of any of them (for ex-

ample, your niece or nephew), or

Father, mother, or an ancestor or sibling of

either of them (for example, your grand-

mother, grandfather, aunt, or uncle), or

Stepbrother, stepsister, stepfather, step-

mother, son-in-law, daughter-in-law, fa-

ther-in-law, mother-in-law, brother-in-law,

or sister-in-law, or

Any other person (other than your spouse)

who lived with you all year as a member of

your household if your relationship did not

violate local law. If the person did not live

with you for the required time, see Excep-

tion to time lived with you on page 11, and

• Who was not a qualifying child of any tax-

payer for 2019. For this purpose, a person

is not a taxpayer if he or she is not required

to file a Hawaii income tax return and ei-

ther does not file such a return or files only

to get a refund of withheld income tax or

estimated tax paid, and

• Who had gross income of less than $4,200

in 2019. If the person was permanently and

totally disabled, see Exception to gross in-

come test on page 11, and

• For whom you provided over half of his or

her support in 2019. But see Children of

divorced or separated parents on this page,

and Multiple support agreements and Kid-

napped child on page 11.

1. Does any person meet the conditions to be

your qualifying relative?

Yes. Go to Question 2.

No. Stop. Go to Form N-11, line 7.

2. Was your qualifying relative a U.S. citizen,

U.S. national, U.S. resident alien, or a resi-

dent of Canada or Mexico? If your qualify-

ing relative was adopted, see Exception to

the citizen test on page 11.

Yes. Go to Question 3.

No. Stop. You cannot claim this person as

a dependent.

3. Was your qualifying relative married?

Yes. See Married person on page 11.

No. Go to Question 4.

4. Could you, or your spouse if filing jointly,

be claimed as a dependent on someone

else’s 2019 tax return?

Yes. Stop. You cannot claim any depen-

dents. Go to Form N-11, line 7.

No. You can claim this person as a depen-

dent.

Deﬁ nitions and Special Rules

Adopted child. An adopted child is always

treated as your own child. An adopted child

includes a child lawfully placed with you for

legal adoption.

Children of divorced or separated parents.

A child will be treated as the qualifying child

or qualifying relative of his or her noncusto-

dial parent if all of the following conditions

apply.

1. The parents are divorced, legally separat-

ed, separated under a written separation

agreement, or lived apart at all times dur-

ing the last six months of 2019 (whether or

not they are or were married).

2. The child received over half of his or her

support for 2019 from the parents (and the

rules on Multiple support agreements, on

page 11, do not apply). Support of a child

received from a parent’s spouse is treated

as provided by the parent.

3. The child is in custody of one or both of the

parents for more than half of 2019.

4. Either of the following applies.

a. The custodial parent signs federal Form

8332 or a substantially similar statement

that he or she will not claim the child as

a dependent for 2019, and the noncusto-

dial parent includes a copy of the form

or statement with his or her return. If

the divorce decree or separation agree-

ment went into effect after 1984 and be-

fore 2009, the noncustodial parent may

be able to include certain pages from the

decree or agreement instead of federal

Form 8332. See Post-1984 and pre-2009

decree or agreement and Post-2008 de-

cree or agreement.

b. A pre-1985 decree of divorce or separate

maintenance or written separation agree-

ment between the parents provides that

the noncustodial parent can claim the

child as a dependent, and the noncusto-

dial parent provides at least $600 for sup-

port of the child during 2019.

If conditions (1) through (4) apply, only

the noncustodial parent can claim the child

for purposes of the dependency exemption.

However, this does not allow the noncustodial

parent to claim head of household filing sta-

tus, the credit for child and dependent care

expenses, the exclusion for dependent care

benefits, or the earned income tax credit. See

federal Publication 501 for details.

Custodial and noncustodial parents. The

custodial parent is the parent with whom the

child lived for the greater number of nights

in 2019. The noncustodial parent is the other

parent. If the child was with each parent for

an equal number of nights, the custodial par-

ent is the parent with the higher federal ad-

justed gross income. See federal Publication

501 for an exception for a parent who works

at night, rules for a child who is emancipated

under state law, and other details.

Post-1984 and pre-2009 decree or agree-

ment. The decree or agreement must state all

three of the following.

1. The noncustodial parent can claim the

child as a dependent without regard to any

condition, such as payment of support.

2. The other parent will not claim the child

as a dependent.

3. The years for which the claim is released.

The noncustodial parent must include all of

the following pages from the decree or agree-

ment.

• Cover page (include the other parent’s so-

cial security number on that page).

• The pages that include all the information

identified in (1) through (3) above.

• Signature page with the other parent’s sig-

nature and date of agreement.

You must include the required information

even if you filed it with your return in an ear-

lier year.

Post-2008 decree or agreement. If the di-

vorce decree or separation agreement went

into effect after 2008, the noncustodial par-

ent cannot include pages from the decree or

agreement instead of federal Form 8332. The

custodial parent must sign either federal Form

8332 or a substantially similar statement the

only purpose of which is to release the custo-

dial parent’s claim to an exemption for a child,

and the noncustodial parent must include

a copy with his or her return. The form or

statement must release the custodial parent’s

claim to the child without any conditions. For

example, the release must not depend on the

noncustodial parent paying support.

Step 2

Step 3

Page 11

Release of exemption revoked. A custodial

parent who has revoked his or her previous

release of a claim to exemption for a child

must include a copy of the revocation with his

or her return. For details, see federal Form

8332.

Exception to citizen test. If you are a U.S.

citizen or U.S. national and your adopted child

lived with you all year as a member of your

household, that child meets the requirement

to be a U.S. citizen.

Exception to gross income test. If your rela-

tive (including a person who lived with you all

year as a member of your household) is per-

manently and totally disabled (defined on this

page), certain income for services performed

at a sheltered workshop may be excluded for

this test. For details, see federal Publication

501.

Exception to time lived with you. Tempo-

rary absences by you or the other person for

special circumstances, such as school, vaca-

tion, business, medical care, military service,

or detention in a juvenile facility, count as

time the person lived with you. Also see Chil-

dren of divorced or separated parents on page

10, or Kidnapped child on this page.

If the person meets all other requirements

to be your qualifying child but was born or

died in 2019, the person is considered to have

lived with you for more than half of 2019 if

your home was this person’s home for more

than half the time he or she was alive in 2019.

Any other person is considered to have lived

with you for all of 2019 if the person was born

or died in 2019 and your home was this per-

son’s home for the entire time he or she was

alive in 2019.

Foster child. A foster child is any child

placed with you by an authorized placement

agency or by judgment, decree, or other order

of any court of competent jurisdiction.

Kidnapped child. If your child is presumed

by law enforcement authorities to have been

kidnapped by someone who is not a family

member, you may be able to take the child

into account in determining your eligibility

for head of household or qualifying widow(er)

filing status, the dependency exemption, and

the earned income tax credit. See federal Pub-

lication 501.

Married person. If the person is married

and files a joint return, you cannot claim that

person as your dependent. However, if the

person is married but does not file a joint re-

turn or files a joint return only to claim a re-

fund of withheld income tax or estimated tax

paid, you may be able to claim him or her as

a dependent. See federal Publication 501. In

that case, go to Step 2, Question 3, on page 10

(for a qualifying child) or Step 3, Question 4,

on page 10 (for a qualifying relative).

Multiple support agreements. If no one

person contributed over half of the support

of your relative (or a person who lived with

you all year as a member of your household)

but you and another person(s) provided more

than half of your relative’s support, special

rules may apply that would treat you as hav-

ing provided over half of the support. For de-

tails, see federal Publication 501.

Permanently and totally disabled. A person

is permanently and totally disabled if, at any

time in 2019, the person cannot engage in any

substantial gainful activity because of a physi-

cal or mental condition and a doctor has de-

termined that this condition has lasted or can

be expected to last continuously for at least a

year, or can be expected to lead to death.

Public assistance payments. If you received

payments under the Temporary Assistance

for Needy Families (TANF) program or other

public assistance program and you used the

money to support another person, see federal

Publication 501.

Qualifying child of more than one person.

Even if a child meets the conditions to be the

qualifying child of more than one person, only

one person can claim the child as a qualify-

ing child for the (1) dependency exemption,

(2) head of household filing status, (3) credit

for child and dependent care expenses, (4)

exclusion for dependent care benefits, and (5)

earned income tax credit, unless the special

rule for Children of divorced or separated par-

ents on page 10 applies.

No other person can take any of the five tax

benefits listed above based on the qualifying

child. If you and any other person can claim

the child as a qualifying child, the following

rules apply.

• If only one of the persons is the child’s par-

ent, the child is treated as the qualifying

child of the parent.

• If the parents file a joint return together

and can claim the child as a qualifying

child, the child is treated as the qualifying

child of the parents.

• If the parents do not file a joint return to-

gether but both parents claim the child as

a qualifying child, the child will be treated

as the qualifying child of the parent with

whom the child lived for the longer period

of time in 2019. If the child lived with each

parent for the same amount of time, the

child will be treated as the qualifying child

of the parent who had the higher federal

adjusted gross income (AGI) for 2019.

• If no parent can claim the child as a quali-

fying child, the child is treated as the

qualifying child of the person who had the

highest federal AGI for 2019.

• If a parent can claim the child as a qualify-

ing child but no parent does so claim the

child, the child is treated as the qualifying

child of the person who had the highest

federal AGI for 2019, but only if that per-

son’s federal AGI is higher than the highest

federal AGI of any parent of the child who

can claim the child.

Example. Your daughter meets the condi-

tions to be a qualifying child for both you and

your mother. Your daughter does not meet the

conditions to be a qualifying child of any other

person, including her other parent. Under

the rules just described, you can claim your

daughter as a qualifying child for all of the

five tax benefits listed above for which you

otherwise qualify. Your mother cannot claim

any of the five tax benefits listed above based

on your daughter. However, if your mother’s

federal AGI is higher than yours and you do

not claim your daughter as a qualifying child,

your daughter is the qualifying child of your

mother.

If you will be claiming the child as a qualify-

ing child, go to Step 2 on page 10. Otherwise,

stop; you cannot claim any benefits based on

this child.

Student. A student is a child who during

any part of five calendar months of 2019 was

enrolled as a full-time student at a school,

or took a full-time, on-farm training course

given by a school or a state, county, or local

government agency. A school includes a tech-

nical, trade, or mechanical school. It does not

include an on-the-job training course, corre-

spondence school, or school offering courses

only through the Internet.

Birth or Death of Dependent. You can take

an exemption for a dependent who was born

or who died during the taxable year if he or

she met the tests for a dependent while alive.

This means that a baby who lived only a few

minutes can be claimed as a dependent.

Line 6e

Add the numbers you entered in the boxes

for 6a, 6b, 6c, and 6d. Enter the total in the

box on line 6e.

Step 6

Fill in your return

Line-By-Line instructions for filling in Form

-11 begin on page 12 and end on page 32.

Please read and follow the instructions care-

fully.

Rounding Off to Whole

Dollars

The Department requires individual tax-

payers to round off cents to the nearest whole

dollar for all dollar entries on the tax return

and schedules. To do so, drop amounts under

50 cents and increase amounts from 50 to 99

cents to the next dollar. For example: $1.39 be-

comes $1 and $2.69 becomes $3. If you have to

add two or more amounts to figure the amount

to enter on a line, schedule, or worksheet, you

may choose to use one of two methods. Once

a method of rounding is established, you must

use the same method throughout the return.

The first method is to include the cents when

adding and round off only the total. The other

method is to round off each entry. For exam-

ple: You received two W-2 forms, one showing

Hawaii withholding of $50.55 and one show-

ing Hawaii withholding of $185.73. For round-

ing method 1, show your total Hawaii with-

holding as $236, ($50.55 + $185.73 = $236.28

rounded to $236). For rounding method 2,

show your total Hawaii withholding as $237,

($50.55 rounded to $51.00 + $185.73 rounded

to $186.00 = $51 + $186 = $237).

Page 12

Line-By-Line Instructions -

Form N-11

Special Note to Part-Year

Residents

Form N-11 is to be filed by full-year residents

only. If you were a Hawaii resident for only

part of 2019, you must file Form N-15 instead.

Caution: The dates to be entered at the top of

Form N-11 are not for part-year residents to

enter the period of their Hawaii residency.

Income

An individual who was a Hawaii resident for

he entire year is subject to income tax on his

or her entire income, computed without re-

gard to source in the State.

Line 7

Federal Adjusted Gross

Income (Federal AGI)

Report the federal AGI from the appropri-

ate line of federal Form 1040 or Form 1040-

SR. If you are not required to file a federal

income tax return, use federal Form 1040 as a

worksheet to determine the amount to report

as your federal AGI.

If you are filing a joint return for federal

income tax purposes and a married filing

separate return for state income tax purposes,

use federal Form 1040 as a worksheet to de-

termine the amount to report as your federal

AGI. Your federal AGI must be calculated as

if you are filing a federal married filing sepa-

rate return.

Note: Since the federal government does not

recognize civil unions as married individuals

for federal income tax purposes, civil unions

will continue to file as unmarried individuals

on their federal income tax returns. There-

fore, they should use federal Form 1040 as a

worksheet to determine the amount to report

as their federal AGI. Their federal AGI must

be calculated as if they are filing a federal

married filing joint return or a federal mar-

ried filing separate return.

If the federal AGI is a negative number,

shade the minus (-) in the box to the left of the

amount boxes.

Hawaii Additions to

Federal A

Line 8

Difference Between State and

Federal Wages

If the amount in Form W-2, Box 16 (State

wages) is larger than Form W-2, Box 1 (Fed-

eral wages), subtract the federal wages from

the state wages and enter the difference here.

If you receive more than one Form W-2, add

the differences from all of the forms. For ex-

ample, federal employees getting Cost of Liv-

ing Allowance (COLA) or Living Quarter Al-

lowance (LQA) may see a difference that must

be reported here. If you received COLA or

LQA and do not see a difference between state

and federal wages, enter the amount of COLA

or LQA reported on your Form W-2. State or

County employees who are in the contributory

or hybrid plan of the Employees Retirement

System also will see a difference that must be

reported here.

Line 9

Interest on Out-of-State

Bonds, Including Municipal

Bonds

If you received interest from bonds issued

y another State, or a county, city, or political

subdivision of another State (including inter-

est distributions from a mutual fund investing

in these bonds), enter the interest on line 9.

Do not include interest from bonds issued by

the Governments of Puerto Rico, U.S. Virgin

Islands, Guam, and American Samoa, or any

of their political subdivisions. Also, do not in-

clude distributions of short-term or long-term

gains because these amounts are included in

federal AGI.

Note: Interest from bonds issued by Hawaii,

including Hawaii municipal bonds, is exempt

from Hawaii and federal income tax.

Line 10

Other Hawaii Additions to

Federal AGI

This line is used to report other items that

are taxed by Hawaii but are not taxed by the

federal government, such as:

• Differences in the taxable portion of the

Hawaii tax refund.

• Distributions and deemed distributions

from Individual Housing Accounts.

• Peace Corps compensation.

• Differences in depreciation and gain.

• Compensation from temporary employ-

ment outside the United States.

• Differences in the deduction for student

loan interest.

• Differences in the taxable portion of em-

ployer-provided adoption benefits.

• Qualified tuition program distributions

for elementary and secondary school ex-

penses.

• Distributions from certain foreign corpo-

rations.

• Other adjustments.

These items are explained in more detail as

follows.

Taxable Refund of State Income

Taxes

Note: A refundable state tax credit (except for

the refundable food/excise tax credit, credit for

low-income household renters, credit for child

and dependent care expenses, and credit for

child passenger restraint system(s)) is sub-

ject to income tax to the extent the refundable

credit exceeds the taxpayer’s tax liability and

results in a cash payment from the state. Be-

cause such a payment is not actually a refund

of prior taxes paid, it is not treated as a tax re-

fund potentially excludable under IRC section

111 (recovery of tax benefit items). Therefore,

the State Tax Refund Worksheet on page 37

should not be used to determine the taxable

portion of these refundable state tax credits.

For more information, see Tax Information

Release No. 2010-10, “Common Income Tax &

General Excise Tax Issues Associated with the

Renewable Energy Technologies Income Tax

Credit, HRS § 235-12.5.”

The taxable portion of your Hawaii tax re-

fund may be different from the amount re-

ported on your federal return. Use the State

Tax Refund Worksheet on page 37 to figure the

taxable portion of your refund and to deter-

mine if an adjustment needs to be made here.

Note: None of your refund is taxable if, in the

year you paid the tax, you either (a) did not

itemize deductions, (b) elected to deduct state

and local general sales taxes instead of state

and local income taxes, or (c) did not deduct

state and local income taxes because your

federal adjusted gross income was above cer-

tain threshold amounts.

If you received a refund or credit in 2019

for state income taxes you paid before 2019,

you may have to report it as income on your

Hawaii income tax return. You should receive

federal Form 1099-G, or a similar statement,

showing the amount of the refund.

Any part of a refund of state or local income

taxes paid before 2019 that you were entitled

to receive in 2019 but chose to apply to your

2019 estimated state income tax is considered

to have been received in 2019.

If you received a refund of 2018 taxes and

you deducted state income taxes on line 21b of

your 2018 Form N-11, figure the taxable por-

tion of your refund using the State Tax Refund

Worksheet on page 37. When completing the

State Tax Refund Worksheet on page 37, enter

an amount on line 2e only if the carryover of

the residential construction and remodeling

tax credit was claimed for construction or

renovation costs for a residential unit that does

not constitute business property.

Note: If you received income tax refunds from

other states, include these amounts on line 1

of the State Tax Refund Worksheet on page 37.

If your refund included taxes from any pre-

vious year in which you itemized deductions,

a similar calculation must be done for each

previous year.

If part of your refund was interest, you

should include that part in your federal Form

1040 or Form 1040-SR as taxable interest in-

come.

If your 2018 Hawaii AGI was over $166,800

($83,400 for married taxpayers filing sepa-

rately), you may be able to report a smaller

amount of your tax refund as income because

your itemized deductions were reduced in

2018. To compute the proper amount, see the

2017 federal Publication 525, “Taxable and

Nontaxable Income,” under Itemized deduc-

tions limited. In the computation, however,

the Hawaii standard deduction amounts must

Page 13

be used, the amount of the refund due to the

Hawaii credits listed in the State Tax Refund

Worksheet is subtracted, and the base amount

for the limitation of itemized deductions re-

mains at $166,800 ($83,400 for married tax-

payers filing separately). If you use this cal-

culation, enter the result on line 8 of the State

Tax Refund Worksheet on page 37.

If your 2018 state and local income tax re-

fund is more than your 2018 state and local

income tax deduction minus the amount you

could have deducted as your 2018 state and

local general sales taxes, see federal Publica-

tion 525, “Taxable and Nontaxable Income,”

under Itemized Deduction Recoveries.

Individual Housing Accounts

If you purchased a principal residence with

an Individual Housing Account (IHA), or you

are notified by an IHA trustee that you have

received a taxable distribution, report the tax-

able amount on line a of the Hawaii Additions

Worksheet on page 37.

• If you purchased residential property be-

fore January 1, 1990, with a distribution

from an IHA, you must include in gross

income in the year the property is sold,

conveyed, or transferred an amount equal

to the amount of the distribution, unless

an election was made to include one-tenth

of the distribution in gross income each

year for ten years. In addition, a penalty is

added to your gross income. Attach Form

N-103, Sale of Your Home, to figure the ad-

ditional gross income.

• If you purchased residential property af-

ter December 31, 1989, you must include

in gross income one-tenth of the distribu-

tion each year for ten years. If you sell the

property purchased with an IHA distribu-

tion before the end of the ten-year period,

the remaining amount of the distribution

not previously reported must be included

in gross income in the year of sale. In addi-

tion, a penalty is added to your tax liability.

Attach Form N-103, Sale of Your Home, to

figure the additional tax liability.

• If you purchased residential property af-

ter December 31, 1996, with a distribution

from an IHA established prior to January

1, 1990, and you have made the election to

do so, you must include in gross income in

the year the property is sold, conveyed, or

transferred an amount equal to the amount

of the distribution. In addition, a penalty is

added to your gross income. Attach Form

N-103, Sale of Your Home, to figure the ad-

ditional gross income.

• If you use an IHA distribution for any pur-

pose other than to purchase a first princi-

pal residence in Hawaii, or if you borrow

against the IHA for such a purpose, the

distribution (or the loan amount) is tax-

able, and a 10% penalty tax is imposed. The

additional tax is the same amount shown

in Box 4 of Form N-2, Distribution from an

Individual Housing Account, and must be

included on line 27.

• If you establish an IHA and later marry

a person owning residential property, the

IHA will terminate and distribute all of

the assets to you. In this case, you must

include the total distribution in your gross

income. No penalty tax is imposed, but the

10% is still withheld. Be sure to claim the

withheld amount on line 37.

• If an individual establishes an IHA and

then dies or becomes totally disabled, spe-

cial rules apply. For more information, see

sections 18-235-5.5(r) and (s), Hawaii Ad-

ministrative Rules (HAR).

Peace Corps Compensation

If you received compensation for working

with the Peace Corps, include the amount of

that compensation on line c of the Hawaii Ad-

ditions Worksheet on page 37.

Depreciation and Gain Adjustments

Note: Hawaii did not adopt the federal pro-

visions for bonus depreciation, increased

IRC section 179 deduction (Hawaii limit is

$25,000), and inclusion of off-the-shelf com-

puter software as property qualifying for the

IRC section 179 deduction. If the bonus depre-

ciation, increased IRC section 179 deduction,

or IRC section 179 deduction for off-the-shelf

computer software is claimed for federal tax

purposes, you must: (a) complete a federal

Form 4562 for Hawaii tax purposes, (b) at-

tach the completed federal Form 4562 to the

Hawaii tax return, (c) make the necessary

adjustments to the Hawaii tax return for the

depreciation difference between federal and

Hawaii on line d of the Hawaii Additions

Worksheet on page 37, and (d) attach to the

Hawaii tax return any worksheet showing the

computation of the adjustments. You must

also keep records of the differences in the as-

set’s depreciable basis for federal and Hawaii

tax purposes.

If you claimed the capital goods excise tax

credit, hotel construction and remodeling tax

credit, technology infrastructure renovation

tax credit, or drought mitigating water stor-

age facility income tax credit, and did not in-

clude the amount of the credit as income in

the year in which it is properly recognized

under your method of accounting, then your

adjusted basis in the assets was decreased by

the amount of the credit claimed.

• If you are claiming a depreciation deduc-

tion for any such asset, multiply the depre-

ciation percentage for this taxable year by

the amount of the applicable income tax

credit. Add the results for all of your assets

for which the applicable income tax credit

was claimed, and enter this amount on line

d of the Hawaii Additions Worksheet on

page 37.

• If you sold or otherwise disposed of any

such asset, your gain or loss will be dif-

ferent from that reported on your federal

return. The difference will be the amount

of the applicable income tax credit that has

not already been recovered through depre-

ciation deductions. Enter this amount on

line e of the Hawaii Additions Worksheet

on page 37. In addition, you may need

to file Form N-312, Recapture of Capital

Goods Excise Tax Credit; see Form N-312

for more information.

Temporary Employment Outside the

U.S.

If, while you were a Hawaii resident, you

worked outside the United States and you

filed federal Form 2555 or 2555-EZ to exclude

some of your earned income, you need to add

back the amounts here because Hawaii does

not have this exclusion. On line f of the Ha-

waii Additions Worksheet on page 37, enter:

• The amount on Form 2555-EZ, line 18; or

• The sum of Form 2555, line 43, and Form

2555, line 48.

Student Loan Interest Deduction

The student loan interest deduction may be

different from the amount claimed on your

federal return since your Hawaii modified

adjusted gross income must be used in the

computation instead of your federal modified

adjusted gross income, and Hawaii’s modified

adjusted gross income ranges for phasing out

the deduction will not be adjusted for infla-

tion. Use the Student Loan Interest Deduction

Worksheet on page 40 to determine if an ad-

justment needs to be made here.

Employer-Provided Adoption

Beneﬁ ts

The taxable portion of your employer-pro-

vided adoption benefits may be different from

the amount claimed on your federal return

since your Hawaii modified adjusted gross

income must be used in the computation in-

stead of your federal modified adjusted gross

income, and Hawaii’s exclusion amount and

modified adjusted gross income limit will not

be adjusted for inflation. Use the Adoption

Benefits Worksheet on page 40 to determine if

an adjustment needs to be made here.

Qualiﬁ ed Tuition Program

Distributions for Elementary and

Secondary School Expenses

Hawaii conforms to the federal provision

where distributions from qualified tuition pro-

grams are not taxable if used to pay for quali-

fied higher education expenses. However, Ha-

waii did not adopt the federal provision that

elementary and secondary school expenses of

up to $10,000 per year are qualified expenses

for qualified tuition programs. Therefore, if a

distribution was used to pay for elementary

and secondary school expenses, include the

taxable part of the distribution on line i of the

Hawaii Additions Worksheet on page 37.

Owners of Certain Foreign

Corporations

Certain foreign corporations are classified

as Controlled Foreign Corporations (CFCs),

Passive Foreign Investment Companies (PF-

ICs), or Foreign Personal Holding Companies

(FPHCs). Federal law requires that share-

holders of these foreign companies recognize

certain income earned by these companies

before the companies distribute dividends.

Hawaii has no comparable provisions. If you

own one or more of these corporations, you

had to file federal Form 5471, or you sold

stock in any of these kinds of companies, you

may need to make an adjustment here.

Page 14

Other Adjustments

Other adjustments to federal AGI include the

following:

• Hawaii has not adopted the federal provi-

sions relating to:

– the deduction for capital costs incurred

in complying with environmental protec-

tion agency sulfur regulations under IRC

section 179B, and

– the exclusion from income of benefits un-

der a dependent care assistance program

that increases the amount of income that

is treated as having been earned by a

spouse who is either a full-time student

or not able to care for himself or herself.

There may be other adjustments to federal

AGI that are not discussed in these instruc-

tions. Such adjustments arise, for example, if

a taxpayer makes an election for federal tax

purposes (such as an IRC section 179 elec-

tion) but does not make the same election for

Hawaii tax purposes. If you believe that an ad-

ditional adjustment is needed to arrive at Ha-

waii adjusted gross income, enter the amount

of the adjustment on line j of the Hawaii Addi-

tions Worksheet on page 37, write “X” on the

dotted line next to line 10, and attach an expla-

nation to Form N-11 that includes the amount

of the adjustment and how you calculated it.

Line 11

otal Hawaii Additions to

Federal AGI

Add the amounts on lines 8, 9, and 10. Enter

the result on this line.

Line 12

Add lines 7 and 11. Enter the result on this

ine.

If line 12 is a negative number, shade the

minus (-) in the box to the left of the amount

boxes.

Hawaii Subtractions from

Federal AGI

Line 13

Pensions

Hawaii does not tax qualifying distribu-

tions from an employer-funded pension plan.

If you received qualifying distributions from

an employer-funded profit sharing, defined

contribution, or defined benefit plan, or from

a government retirement system (e.g., federal

civil service, military pension, state or coun-

ty retirement system), enter the qualifying

amount here.

Nontaxable Distributions

The following lines describe what qualifying

distributions are. These qualifying distribu-

tions were included in your federal AGI and

will be excluded on this line. For a distribution

to qualify, it must be paid by a pension plan by

reason of retirement, disability, or death. The

pension plan does not have to be a “qualified

plan” as defined in IRC section 401.

Employer-Funded Pension Plans

The following three types of distributions

are not taxed by Hawaii and should be includ-

ed on line 13:

(1) Pension or annuity distributions from a

public (i.e., government) retirement system

(e.g., federal civil service annuity, military

pension, state or county retirement system),

unless voluntary contributions were made by

an employee under an elective right. For more

information, see section 18-235-7-02, HAR.

(2) Distributions from a private employer

pension plan received upon retirement (in-

cluding early retirement and disability retire-

ment) if the employee did not contribute to the

pension plan.

(3) Distributions from a pension plan at

age 70-1/2 that are made to comply with the

federal mandatory payout rule do qualify as

a retirement payment whether or not the em-

ployee is still working full time.

Distributions from a private employer pen-

sion plan received upon retirement are par-

tially taxed by Hawaii if the employee con-

tributed to the pension plan.

Rollover IRAs

A rollover IRA is treated as a continuation

of the original plan that provided the money

that is rolled over. If distributions from the

original plan would be characterized as a

qualified distribution, distributions out of the

rollover IRA need not be reported as well.

Example - An individual received a lump

sum distribution from an employer-funded

profit-sharing plan upon retirement. The

individual did not contribute to the profit-

sharing plan. The entire lump sum distribu-

tion was rolled over to an IRA. In 2019, the

individual rolled over $50,000 from the IRA

to a Roth IRA. The entire amount rolled over

to the Roth IRA represents the lump sum

distribution received by the individual upon

retirement and earnings thereon. Since the

lump sum distribution that the individual re-

ceived upon retirement qualifies as a pension,

the amount rolled over from the regular IRA

to the Roth IRA also qualifies as a pension.

Therefore, the amount rolled over to the Roth

IRA is exempt from Hawaii’s income tax.

Taxable Pensions and Annuities

Early Distributions

Early distributions from a pension plan that

are subject to the 10% federal penalty tax do

not qualify and are taxable.

Deferred Compensation Plans

Distributions from a deferred compensa-

tion plan may be partly or fully taxable. A de-

ferred compensation plan includes any plan in

which the employee has a choice of whether

to contribute money into the plan or take that

amount in cash or property. Examples include

401(k) plans, salary reduction Simplified Em-

ployee Pension (SARSEP) plans, the Federal

Thrift Savings Plan, and section 457 plans like

the State of Hawaii Deferred Compensation

Plan.

Annuity Plans

Retirement vehicles that you fund yourself,

such as annuity plans and Individual Retire-

ment Accounts (IRAs) that are not funded

through a Simplified Employee Pension (SEP)

plan, are considered to be your own invest-

ments. Distributions from these plans may be

fully or partly taxable, depending on whether

your IRAs include deductible or nondeduct-

ible contributions. See federal Publications

590-A and 590-B, and federal Form 8606, for

more details.

Rollover IRAs

A rollover IRA is treated as a continuation

of the original plan that provided the money

that is rolled over. If distributions from the

original plan would be characterized as tax-

able, distributions out of the rollover IRA

would be taxable as well.

Example - An individual received a lump

sum distribution from an employer-funded

profit-sharing plan upon separation from ser-

vice before retirement. The individual did

not contribute to the profit-sharing plan. The

entire lump sum distribution was rolled over

to an IRA. In 2019, the individual rolled over

$50,000 from the IRA to a Roth IRA. The en-

tire amount rolled over to the Roth IRA repre-

sents the lump sum distribution received by

the individual upon separation from service

and earnings thereon. Since the lump sum

distribution that the individual received upon

separation from service does not qualify as

a pension (the distribution is not paid upon

retirement, disability, or death), the amount

rolled over from the regular IRA to the Roth

IRA also does not qualify as a pension. There-

fore, the amount rolled over to the Roth IRA is

taxable for Hawaii’s income tax.

Hybrid Plans

If you received a distribution from a plan

that is partly pension and partly deferred

compensation, such as a 401(k) plan with a

profit sharing component or an employer

matching program, a SEP plan with employer

contributions as well as a salary reduction op-

tion, or a similar hybrid plan, attach Schedule

J to figure the taxable amount.

Lump-Sum Distributions

If you received a lump-sum distribution

from a pension plan and you are electing to

use the special ten-year averaging method,

attach Schedule J and Form N-152, Tax on

Lump-Sum Distributions, to figure the tax-

able amount.

Note: If your lump-sum distribution included

capital gain amounts, you may be able to re-

duce your tax by including the capital gain

amounts on Form N-152 and electing the capi-

tal gains treatment. See Form N-152 Instruc-

tions for more information.

To compute the taxable portion of your an-

nuity or pension, use Schedule J.

Caution: Certain transactions, such as loans

against your interest in a qualified plan, may

be treated as taxable distributions.

Page 15

For more information on the taxation of pen-

sions, see sections 18-235-7-02 to 18-235-7-

03, HAR, Tax Information Release No. 90-4,

“Taxability of Benefit Payments from Pension

Plan to Participants who Attain Age 70-1/2 as

Required by the Internal Revenue Code (IRC)

Section 401(a)(9)(C),” and Tax Information

Release No. 96-5, “Taxation of Pensions Un-

der the Hawaii Net Income Tax Law: Deferred

Compensation Arrangements; Rollover IRAs;

Sub-Accounts of Pension Plans; Social Secu-

rity and Railroad Retirement Act Benefits;

Limitation on Deductions for Contributions to

a Nonqualified Plan.”

Line 14

Social Security Beneﬁ ts

Hawaii does not tax Social Security or first

tier Railroad Retirement Act benefits. Enter

the amount from federal Form 1040 or Form

1040-SR, line 5b.

Line 15

Military Reserve or Hawaii

National Guard Duty Pay

Exclusion

Hawaii does not tax the first $6,735 received

by each member of the reserve components of

the army, navy, air force, marine corps, coast

guard of the United States of America, and the

Hawaii national guard, as compensation for

performance of duty as such. If you qualify,

enter the smaller of:

• $6,735, or

• Your pay, as shown on Box 16 of the Form

W-2 sent to you by your reserve compo-

nent.

If you are married filing a joint return, and

you and your spouse qualify, add the exclu-

sions for both of you and enter the total on line

15.

Line 16

Payments to an Individual

Housing Account

You may be able to deduct from your gross

income up to $5,000 paid in cash during the

taxable year into a trust account which is es-

tablished for saving for a down payment on

your first principal residence. A deduction

not to exceed $10,000 shall be allowed for a

married couple filing a joint return. No de-

duction shall be allowed on any amounts dis-

tributed less than 365 days from the date on

which a contribution is made to the account.

Any deduction claimed for a previous taxable

year for amounts distributed less than 365

days from the date on which a contribution

was made shall be disallowed and the amount

deducted shall be included in the previous

taxable year’s gross income and the tax reas-

sessed. The account is to encourage first-time

home buyers to save money for a down pay-

ment on a home.

The “first principal residence” means a res-

idential property purchased with the payment

or distribution from the individual housing ac-

count which shall be owned and occupied as

the only home by an individual who did not

have any previous interest in, individually, or

if the individual is married, whose spouse did

not own any interest in a residential property

inside or outside of Hawaii within the last 5

years prior to opening the IHA.

The amounts paid in cash allowable as a

deduction for all taxable years are limited to

$25,000, in the aggregate, excluding interest

earned or accrued. This limitation also applies

to married individuals having separate ac-

counts; the sum of such separate accounts and

the deduction shall not exceed $25,000 in the

aggregate, excluding interest income earned

or accrued.

For more information, see section 18-235-

5.5, HAR.

Line 17

Exceptional

Trees Deduction

You may deduct up to $3,000 per exceptional

tree for qualified expenditures you made dur-

ing the taxable year to maintain the tree on

your private property. The tree must be desig-

nated as an exceptional tree by the local coun-

ty arborist advisory committee under chapter

58, Hawaii Revised Statutes (HRS). Qualified

expenditures are those expenses you incurred

to maintain the exceptional tree (excluding

interest) that are deemed “reasonably neces-

sary” by a certified arborist. No deduction is

allowed in more than one taxable year out of

every three consecutive taxable years.

An affidavit signed by a certified arborist

stating that the amount of expenditures are

deemed reasonably necessary must be at-

tached to your tax return. The affidavit also

must include the following information: (1)

type of tree, (2) location of tree, and (3) de-

scription and amount of expenditures made in

2019 to maintain the tree. The affidavit must

be notarized.

Line 18

Other Ha

waii Subtractions

From Federal AGI

This line is used to report other items that

are taxed by the federal government but are

not taxed by Hawaii, such as:

• Interest on federal obligations, including

U.S. Savings Bonds.

• Differences in the taxable portion of the

Hawaii tax refund.

• Interest earned on an Individual Housing

Account.

• Compensation earned by patients with

Hansen’s disease.

• Expenses not allowed on your federal re-

turn because they were connected with

federal credits.

• Unearned income of children that you in-

cluded in your federal return, if the chil-

dren are filing Hawaii returns.

• Benefits from or premiums paid to legal

services plans.

• Differences in the deduction for student

loan interest.

• Differences in the taxable portion of em-

ployer-provided adoption benefits.

• Certain income from a qualified high tech-

nology business.

• Contributions to and interest earned by an

individual development account.

• Moving expenses.

• Qualified bicycle commuting reimburse-

ment.

• Undistributed income earned by certain

foreign corporations.

• Other adjustments.

These items are explained in more detail as

follows.

Interest on Federal Obligations,

Including U.S. Savings Bonds

If you reported for federal purposes any in-

terest received on federal obligations, includ-

ing Treasury bills and notes and U.S. Savings

Bonds, enter the amount of that interest on

line a of the Hawaii Subtractions Worksheet

on page 37.

For more information about what kinds of

obligations should be reported here, see Tax

Information Release No. 84-1, “Taxability of

Interest on U.S. Obligations.”

If you filed federal Form 8815: If you re-

deemed U.S. Savings Bonds to pay for higher

education tuition and fees and excluded some

or all of the interest for federal purposes,

subtract the amount from Form 8815, line 14,

before entering it on line a. That amount was

already excluded on your federal return.

Taxable Refund of State Income

Taxes

See the instructions for line 10, Taxable

Refund of State Income Taxes, on page 12. In

some cases, the worksheet may call for an ad-

justment to be made here.

Interest on an Individual Housing

Account

If you have an Individual Housing Account,

enter the interest earned by the account, as it

appears on federal Form 1099-INT, on line c

of the Hawaii Subtractions Worksheet on page

37.

Patients With Hansen’s Disease

Hawaii does not tax compensation by Ha-

waii or the U.S. to a patient affected with Han-

sen’s disease (also known as leprosy). Enter

the amount of the qualifying compensation on

line d of the Hawaii Subtractions Worksheet

on page 37.

Expenses Disallowed Because

They Were Connected with Federal

Credits

If you are a business taxpayer; you claimed

certain credits such as the work opportunity

credit or the credit for qualified clinical test-

ing expenses; and some of your business ex-

penses were disallowed because you took the

credits (IRC section 280C), enter the amount

of the disallowed expenses on line e of the

Page 16

Hawaii Subtractions Worksheet on page 37.

Hawaii does not have those credits, and does

allow the expense deductions.

Children Having Unearned Income

If you filed federal Form 8814, Parents’

Election To Report Child’s Interest and Divi-

dends, and you are not filing Form N-814 be-

cause your child will file a Hawaii tax return,

enter the total amount from lines 9, 10, and 12

of federal Form(s) 8814 on line f of the Hawaii

Subtractions Worksheet on page 37. Attach a

copy of federal Form(s) 8814.

Legal Services Plans

If you received benefits from a qualified

group legal services plan or if your employer

contributed to a group legal services plan, and

you reported these benefits or contributions

as taxable income on your federal return,

check with your plan to see that it qualifies

under Hawaii standards. If it does, Hawaii

will not tax these amounts. Enter the amount

of federally taxable benefits or contributions

on line g of the Hawaii Subtractions Work-

sheet on page 37.

Student Loan Interest Deduction

The student loan interest deduction may be

different from the amount claimed on your

federal return since your Hawaii modified

adjusted gross income must be used in the

computation instead of your federal modified

adjusted gross income, and Hawaii’s modified

adjusted gross income ranges for phasing out

the deduction will not be adjusted for infla-

tion. Use the Student Loan Interest Deduction

Worksheet on page 40 to determine if an ad-

justment needs to be made here.

Employer-Provided Adoption

Beneﬁ ts

The taxable portion of your employer-pro-

vided adoption benefits may be different from

the amount claimed on your federal return

since your Hawaii modified adjusted gross

income must be used in the computation in-

stead of your federal modified adjusted gross

income, and Hawaii’s exclusion amount and

modified adjusted gross income limit will not

be adjusted for inflation. Use the Adoption

Benefits Worksheet on page 40 to determine if

an adjustment needs to be made here.

Certain Income from a Qualiﬁ ed

High Technology Business

• Royalties and other income derived from

patents, copyrights, and trade secrets.

Amounts received by an individual or a

qualified high technology business as

royalties and other income derived from

patents, copyrights, and trade secrets (1)

owned by the individual or qualified high

technology business, and (2) developed

and arising out of a qualified high technol-

ogy business are excluded from gross in-

come, adjusted gross income, and taxable

income. If you reported these amounts for

federal purposes, include that amount on

line j of the Hawaii Subtractions Work-

sheet on page 37.

• Stock options income from qualified high

technology business. All income earned

and proceeds derived from stock options

or stock, including stock issued through

the exercise of stock options or warrants,

from a qualified high technology business

or from a holding company of a qualified

high technology business by an employee,

officer, or director of the qualified high

technology business, or investor who

qualified for the high technology business

investment tax credit is excluded from in-

come taxes. If you reported these amounts

for federal purposes, include that amount

on line j of the Hawaii Subtractions Work-

sheet on page 37.

Individual Development Accounts

If you have an individual development ac-

count, enter the amount of contributions you

made to the account, and the amount of inter-

est earned by the account (as it appears on

federal Form 1099-INT) on line k of the Ha-

waii Subtractions Worksheet on page 37.

Moving Expenses

Hawaii did not adopt the federal provi-

sions that suspended (1) the deduction for

moving expenses, and (2) the exclusion from

gross income for qualified moving expense

reimbursements for tax years 2018 through

2025. If you have moving expenses that were

not deducted on your federal return, enter

the amount of the deduction on line l of the

Hawaii Subtractions Worksheet on page 37.

Complete Form N-139 and attach it to your

return. If you have qualified moving expense

reimbursements that were not excluded on

your federal return, enter the amount of the

exclusion on line l of the Hawaii Subtractions

Worksheet on page 37.

Note: If a resident taxpayer leaves the State of

Hawaii for other than temporary or transitory

purposes and is not domiciled in Hawaii, he

or she ceases to be a resident; in such a case,

as with a nonresident taxpayer, expenses in-

curred in moving to a new place of employ-

ment outside the State of Hawaii shall not be

allowed.

Qualiﬁ ed Bicycle Commuting

Reimbursement

Hawaii did not adopt the federal provision

that suspended the exclusion from gross in-

come and wages for qualified bicycle com-

muting reimbursements for tax years 2018

through 2025. If you have qualified bicycle

commuting reimbursements that were not

excluded on your federal return, enter the

amount of the exclusion on line m of the Ha-

waii Subtractions Worksheet on page 37.

Owners of Certain Foreign

Corporations

If you own an interest in a CFC, PFIC, or

FPHC, you had to file federal Form 5471, or

you sold stock in any of these kinds of compa-

nies, see page 13 for further information. You

may need to make an adjustment here.

Other Adjustments

Other adjustments to federal AGI include the

following:

• Scholarship grants received by a student

under the Nursing Scholars Program un-

der section 304A-3304(d), HRS, is not sub-

ject to Hawaii income tax.

• The amount of payment stipend waived

by Department of Education coaches and

dispensed to the school for the benefit of

the coach’s team under section 302A-633.6,

HRS, is not subject to Hawaii income tax.

• The capital loss carryover for qualified

high technology businesses is 15 years.

There may be other adjustments to federal

AGI that are not discussed in these instruc-

tions. Such adjustments arise, for example, if

a taxpayer makes an election for Hawaii tax

purposes (such as an IRC section 179 elec-

tion) but does not make the same election for

federal tax purposes. If you believe you are

entitled to an additional subtraction to ar-

rive at Hawaii adjusted gross income, enter

the amount of the adjustment on line n of the

Hawaii Subtractions Worksheet on page 37,

write “X” on the dotted line next to line 18,

and attach an explanation to Form N-11 that

includes the amount of the adjustment and

how you calculated it.

Line 19

otal Hawaii Subtractions

from Federal AGI

Add the amounts on lines 13 through 18. En-

ter the result on this line.

Line 20

waii Adjusted Gross

Income

Subtract line 19 from line 12. Enter the re-

sult on this line. If line 19 is larger than line

12, you may have a net operating loss.

If the Hawaii AGI is a negative number,

shade the minus (-) in the box to the left of the

amount boxes.

Note: Net operating loss (NOL) carrybacks are

eliminated (except for farming NOLs which are

permitted a two-year carryback), and unused

NOLs can be carried forward indefinitely for

NOLs arising in tax years ending after Decem-

ber 31, 2017. Also, the NOL deduction is limited

to 80% of taxable income for NOLs arising in tax

years beginning after December 31, 2017.

Note: If you carry back the farming NOL and

are due a refund from the carryback, you may

use Form N-109, Application for Tentative Re-

fund from Carryback of Net Operating Loss, to

get a quick refund.

You may elect to carry the farming NOL for-

ward instead of first carrying it back to prior

years. If you make this election, then you can

use your farming NOL only in the carryfor-

ward period.

To make this election, attach a statement to

your original return filed by the due date (in-

cluding extensions) for the farming NOL year.

Page 17

This statement must state that you are electing

to waive the carryback period under section

235-7(d), HRS, and IRC section 172(b)(1)(B)(iv).

If you filed your original return on time but did

not file the statement with it, you can make

this election on an amended return filed with-

in 6 months of the original due date of the re-

turn, but not including any extension. Attach a

statement to your amended return, and write

“Filed pursuant to 26 C.F.R. 301.9100-2” at the

top of the statement. Also include the state-

ment noted above that you are waiving the

carryback period.

Once you elect to waive the carryback period,

it cannot be changed later.

If you do not file this statement on time, the

carryback period cannot be waived and you

must first carry the farming NOL back before

carrying it forward.

Deductions and Taxable

Income Computation

Note: If you can be claimed as a dependent on

nother person’s return, fill in the oval above

line 21. Complete the “Standard Deduction for

Dependents” worksheet on page 22 and enter

the appropriate amount on line 23 if you do

not itemize your deductions.

Lines 21a to 21f

Itemized Deductions

Taxpayers who itemize their deductions

may deduct certain kinds of expenses from

their adjusted gross income.

Taxpayers who do not itemize their deduc-

tions may reduce their adjusted gross income

by the amount of the standard deduction appro-

priate to their filing status. The amount of the

standard deduction is determined on line 23.

You will fall into one of the following three

classes:

• You MUST itemize deductions,

• You choose to itemize, or

• You do not itemize.

The three classes are described as follows:

You MUST Itemize Deductions

You must itemize deductions if:

• You are married, filing a separate return,

and your spouse itemizes.

• You are making a return under IRC sec-

tion 443(a)(1) for a period of less than 12

months because of a change in your annual

accounting period.

You Choose to Itemize

You may choose to itemize your deductions

if you are:

• Married and filing a joint return, or a qual-

ifying widow(er), and your itemized de-

ductions are more than $4,400.

• Married and filing a separate return, or

Single, and your itemized deductions are

more than $2,200.

• Head of Household, and your itemized de-

ductions are more than $3,212.

• A dependent of another taxpayer and

your itemized deductions are more than

the greater of (1) $500 or (2) your earned

income up to the amount of the standard

deduction for your filing status.

You Do Not Itemize

If your itemized deductions are less than the

amount shown above for your filing status (or

you choose not to itemize), go to line 23 and

enter your standard deduction amount there

(unless you MUST itemize as described ear-

lier).

If you itemize, you can deduct part of your

medical and dental expenses, and amounts

you paid for certain taxes, interest, contribu-

tions, casualty and theft losses, and other mis-

cellaneous expenses. These deductions are

explained on the pages that follow.

If you do itemize, complete Worksheets A-1

through A-6 and enter the amounts on Form

N-11, lines 21a to 21f.

Line 21a

Medical and Dental Expenses

Note: All taxpayers are subject to the 10%

threshold for the itemized deduction for medi-

cal expenses, effective for taxable years begin-

ning after December 31, 2018.

Complete Worksheet A-1 on page 38 to fig-

ure your deduction for medical and dental

expenses.

Before you can figure your total deduction

for medical and dental expenses, you must

first figure your adjusted gross income.

You can deduct only the part of your medi-

cal and dental expenses that exceeds 10% of

your Hawaii adjusted gross income.

On Worksheet A-1, line 1, include medical

and dental bills you paid for:

• Yourself.

• Your spouse.

• All dependents you claim on your return.

• Your child whom you do not claim as a de-

pendent because of the rules explained on

page 10 for Children of divorced or sepa-

rated parents.

• Any person you could have claimed as a

dependent on your return except that per-

son received $4,200 or more of gross in-

come or filed a joint return.

• Any person you could have claimed as a

dependent except that you, or your spouse

if filing jointly, can be claimed as a depen-

dent on someone else’s 2019 return.

Example—You provided over half of your

mother’s support but cannot claim her as a de-

pendent because she received $4,200 of wages

during 2019. If part of your support was the

payment of her medical bills, you can include

that part in your medical expenses.

You should include all amounts you paid

during 2019, but do not include amounts re-

paid to you, or paid to anyone else, by hospi-

tal, health or accident insurance, or by your

employer, or paid through a medical savings

account or health savings account.

Examples of Medical and

Dental P

ayments You CAN

Deduct

To the extent you were not reimbursed, you

can deduct what you paid for:

• Insurance premiums for medical and den-

tal care, including premiums for qualified

long-term care contracts, subject to dollar

limitations based on a person’s age. See the

federal instructions to Form 1040 for the

dollar limits.

• Prescription medicines or insulin.

• Acupuncturists, chiropractors, dentists,

eye doctors, medical doctors, occupational

therapists, osteopathic doctors, physical

therapists, podiatrists, psychiatrists, psy-

choanalysts (medical care only), and psy-

chologists.

• Medical examinations, X-ray and labora-

tory services, insulin treatment, and whirl-

pool baths the doctor ordered.

• Diagnostic tests, such as a full-body scan,

pregnancy test, or blood sugar test kit.

• Nursing help. If you paid someone to do

both nursing and housework, you can de-

duct only the cost of nursing help.

• Hospital care (including meals and lodg-

ing), clinic costs, and lab fees.

• Qualified long-term care services.

• The supplemental part of Medicare insur-

ance (Medicare B).

• The premiums you pay for Medicare Part

D insurance.

• A program to stop smoking and for pre-

scription medicines to alleviate nicotine

withdrawal.

• A weight-loss program as treatment for a

specific disease (including obesity) diag-

nosed by a doctor.

• Medical treatment at a center for drug or

alcohol addiction.

• Medical aids such as eyeglasses, contact

lenses, hearing aids, braces, crutches,

wheelchairs, and guide dogs, including the

cost of maintaining them.

• Surgery to improve defective vision, such

as laser eye surgery or radial keratotomy.

• Lodging expenses (but not meals) while

away from home to receive medical care

in a hospital or a medical care facility re-

lated to a hospital, provided there was no

significant element of personal pleasure,

recreation, or vacation in the travel. Don’t

deduct more than $50 a night for each eli-

gible person.

• Ambulance service and other travel costs

to get medical care. If you used your own

car, you can claim what you spent for gas

and oil to go to and from the place you re-

ceived the care; or you can claim 20 cents

per mile. Add parking and tolls to the

amount you claim under either method.

• Cost of breast pumps and supplies that as-

sist lactation.

• Cosmetic surgery that was necessary to

improve a deformity related to a congeni-

Page 18

tal abnormality, an injury from an accident

or trauma, or a disfiguring disease.

Examples of Medical and

Dental Payments You

CANNOT Deduct

You cannot deduct the following:

• The cost of diet food.

• Cosmetic surgery unless it was necessary

to improve a deformity related to a con-

genital abnormality, an injury from an ac-

cident or trauma, or a disfiguring disease.

Note: If expenses for cosmetic surgery are

NOT deductible as medical expenses, then

amounts paid for insurance coverage for

such expenses are NOT deductible. Fur-

thermore, if an employer health plan re-

imburses you for such expenses, the reim-

bursement must be included in your gross

income.

• Life insurance or income protection policies.

• The Medicare tax on your wages and tips

or the Medicare tax paid as part of the self-

employment tax or household employment

taxes.

• The basic cost of Medicare insurance

(Medicare A).

Note: If you were 65 or over but not entitled

to social security benefits, you may deduct

premiums you voluntarily paid for Medi-

care A coverage.

• Nursing care for a healthy baby. (You may

qualify for the credit for child and depen-

dent care expenses; see Schedule X, Part

II.)

• Illegal operations or drugs.

• Imported drugs not approved by the U.S.

Food and Drug Administration (FDA). This

includes foreign-made versions of U.S.-ap-

proved drugs manufactured without FDA

approval.

• Nonprescription medicines, other than in-

sulin (including nicotine gum and certain

nicotine patches).

• Travel your doctor told you to take for rest

or a change.

• Funeral, burial, or cremation costs.

Line 21b

axes

Note: Act 27, Session Laws of Hawaii 2018 (1)

does not adopt the federal provision that lim-

its the deduction for state and local taxes to

$10,000 ($5,000 for a married taxpayer filing

a separate return) for tax years 2018 through

2025, but (2) does adopt the federal provision

that foreign real property taxes cannot be de-

ducted for tax years 2018 through 2025.

Note: If you claim a credit for income taxes

paid to other states and countries, you can-

not also claim those amounts as an itemized

deduction for state and foreign income taxes

paid to another state or foreign country.

Note: Taxpayers can claim a deduction for

state and local, and foreign, income, war prof-

its, and excess profits taxes (or state and local

general sales taxes if an election is made to

deduct state and local general sales taxes in-

stead of state and local income taxes) if their

federal adjusted gross income is less than

$100,000 and they are single or married filing

separately; or less than $150,000 and they are

a head of household; or less than $200,000 and

they are married filing jointly or a qualifying

widow(er).

Complete Worksheet A-2 on page 38 to fig-

ure your deduction for taxes.

Taxes You CAN Deduct

Note: Y

ou can elect to deduct state and local

general sales taxes instead of state and local

income taxes. You cannot deduct both.

State and Local Income Taxes

If you will deduct state and local income

taxes, check box a on line 5 of Worksheet A-2.

Include on this line:

• State and local income taxes withheld

from your salary (as shown on your fed-

eral Form W-2) and withheld from your

unemployment compensation (as shown on

your federal Form 1099-G);

• State and local income taxes paid in 2019

for a prior year, such as taxes paid with

your 2018 state or local income tax return;

• State and local estimated tax payments

made during 2019, including any part of

a prior year refund that you chose to have

credited to your 2019 state or local income

taxes; and

• The NET amount of taxes withheld from

the sale of Hawaii real property interests.

If you are a federal employee receiving a

Cost Of Living Allowance (COLA), not all of

your Hawaii income taxes are deductible for

federal purposes. See IRS Revenue Ruling 74-

140, 1974-1 C.B. 50, for more information. En-

ter on line 5a of Worksheet A-2 on page 38 the

entire amount of state and local income taxes

you paid in 2019, even if you reported a differ-

ent amount on federal Form 1040, Schedule A.

Do not reduce your deduction by any:

• State or local income tax refund or credit

you expect to receive for 2019, or

• Refund of, or credit for, prior year state

and local income taxes you actually re-

ceived in 2019. Instead, see the instruc-

tions for Form N-11, line 10.

For more information about the treatment of

taxes withheld from the sale of real property

interests, see Tax Facts 2010-1, “Understand-

ing HARPTA,” and Tax Information Release

No. 2017-01, “Withholding of State Income

Taxes on the Disposition of Hawaii Real Prop-

erty.”

State and Local General Sales Taxes

Note: For purposes of the deduction for state

and local general sales taxes, Hawaii’s gen-

eral excise tax will qualify as a “sales tax.”

If you elect to deduct state and local general

sales taxes, check box b on line 5 of Worksheet

A-2. To figure your deduction, you can use ei-

ther your actual expenses or the optional sales

tax tables.

Actual Expenses. Generally, you can deduct

the actual state and local general sales taxes

(including compensating use taxes) you paid

in 2019 if the tax rate was the same as the

general sales tax rate. However, sales taxes

on food, clothing, medical supplies, and motor

vehicles are deductible as a general sales tax

even if the tax rate was less than the general

sales tax rate. If you paid sales tax on a motor

vehicle at a rate higher than the general sales

tax rate, you can deduct only the amount of

tax that you would have paid at the general

sales tax rate on that vehicle. Motor vehicles

include cars, motorcycles, motor homes,

recreational vehicles, sport utility vehicles,

trucks, vans, and off-road vehicles. Also in-

clude any state and local general sales taxes

paid for a leased motor vehicle. Do not include

sales taxes paid on items used in your trade

or business.

Note: You must keep your actual receipts

showing general sales taxes paid to use this

method.

Refund of general sales taxes. If you re-

ceived a refund of state or local general sales

taxes in 2019 for amounts paid in 2019, reduce

your actual 2019 state and local general sales

taxes by this amount. If you received a refund

of state or local general sales taxes in 2019

for prior year purchases, do not reduce your

2019 state and local general sales taxes by

this amount. But if you deducted your actual

state and local general sales taxes in the ear-

lier year and the deduction reduced your tax,

you may have to include the refund in income

on line 10 (if not already included on line 7).

See Recoveries in federal Publication 525 for

details.

Optional Sales Tax Tables. Instead of using

your actual expenses, you can use the tables in

the instructions for federal Schedule A (Form

1040 or 1040-SR) to figure your state and local

general sales tax deduction. You may also be

able to add the state and local general sales

taxes paid on certain specified items.

To figure your state and local general sales

tax deduction using the tables, see the instruc-

tions for federal Schedule A (Form 1040 or

1040-SR).

Real Estate Taxes

Note: You cannot deduct foreign taxes you

paid on real estate for tax years 2018 through

2025.

Include taxes you paid on real estate you

own that was not used for business.

If your mortgage payments include your

real estate taxes, you can deduct only the

amount the mortgage company actually paid

to the taxing authority in 2019.

Personal Property Taxes

Include personal property taxes you paid,

but only if the taxes were based on value alone

and were imposed on a yearly basis.

Note: Hawaii does not have a personal prop-

erty tax. However, you may include personal

property taxes you paid to other states.

Page 19

Other Taxes

If you had any deductible tax not listed on

Worksheet A-2, lines 5, 6, or 7 (such as foreign

income taxes), write the amount on Worksheet

A-2, line 8.

Taxes You CANNOT Deduct

• Federal income tax.

•

Federal excise tax on personal property,

transportation, telephone, and gasoline.

• Social security tax (FICA).

• Medicare tax.

• Federal unemployment tax (FUTA).

• Railroad retirement tax (RRTA).

• Customs duties.

• Federal estate and gift taxes.

• Certain state and local taxes, including:

a. Tax on gasoline.

b. Hawaii motor vehicle registration fees,

including car inspection fees.

c. Assessments for sidewalks or other im-

provements to your property.

d. Tax you paid for someone else.

e. License fees. (marriage, driver’s, dog,

hunting, auto, etc.)

f. Tax on liquor, beer, wine, cigarettes, and

tobacco.

g. Inheritance tax.

h. Taxes paid for your business or profes-

sion. (These business taxes are deducted

elsewhere.)

Line 21c

Interest You Paid

Note: Act 27, Session Laws of Hawaii 2018,

does not adopt the federal provisions that (1)

suspends the deduction for interest paid on

home equity loans, and (2) lowers the dollar

limit on mortgages qualifying for the home

mortgage interest deduction for tax years 2018

through 2025.

Complete Worksheet A-3 on page 38 to fig-

ure your deduction for interest.

You should show on Worksheet A-3 interest

on non-business items only. Business-related

interest is deducted elsewhere.

Except for certain mortgage interest, the

amount of your personal interest expense

(such as credit card interest) is not allowed as

an itemized deduction on Worksheet A-3.

Home Mortgage Interest

A home mortgage is any loan that is secured

y your main home or second home. It in-

cludes first and second mortgages, home eq-

uity loans, and refinanced mortgages.

A home can be a house, condominium, co-

operative, mobile home, boat, or similar prop-

erty. It must provide basic living accommo-

dations including sleeping space, toilet, and

cooking facilities.

Limit on home mortgage interest. If you

took out any mortgages after October 13,

1987, your deduction may be limited. Any ad-

ditional amounts borrowed after October 13,

1987, on a line-of-credit mortgage you had

on that date are treated as a mortgage taken

out after October 13, 1987. If you refinanced

a mortgage you had on October 13, 1987, treat

the new mortgage as taken out on or before

October 13, 1987. But if you refinanced for

more than the balance of the old mortgage,

treat the excess as a mortgage taken out after

October 13, 1987.

See the 2017 federal Publication 936 to fig-

ure your deduction if either (1) or (2) next ap-

plies. If you had more than one home at the

same time, the dollar amounts in (1) and (2)

apply to the total mortgages on both homes.

1. You, or your spouse if filing jointly, took

out any mortgages after October 13, 1987, and

used the proceeds for purposes other than to

buy, build, or improve your home, and all of

these mortgages totaled over $100,000 at any

time during 2019. The limit is $50,000 if mar-

ried filing separately. An example of this type

of mortgage is a home equity loan used to pay

off credit card bills, buy a car, or pay tuition.

2. You, or your spouse if filing jointly, took

out any mortgages after October 13, 1987, and

used the proceeds to buy, build, or improve

your home, and these mortgages plus any

mortgages you took out on or before October

13, 1987, totaled over $1 million at any time

during 2019. The limit is $500,000 if married

filing separately.

Note: If the total amount of all mortgages is

more than the fair market value of the home,

additional limits apply. See the 2017 federal

Publication 936.

Investment Interest

Investment interest is interest paid on mon-

y you borrowed that is allocable to property

held for investment. It does not include any

interest allocable to a passive activity.

Note: Expenses and interest for royalties and

other income derived from any patents, copy-

rights, and trade secrets by an individual or

a qualified high technology business are de-

ductible.

Complete and attach Form N-158, Invest-

ment Interest Expense Deduction, to figure

your deduction.

Exception. You do not have to file Form

N-158 if ALL of the following apply:

• Your investment interest expense is not

more than your investment income from

interest and ordinary dividends.

• You have no other deductible investment

expenses.

• You have no disallowed investment inter-

est expense from 2018.

For more details, see federal Publication

550, Investment Income and Expenses.

Interest Expense You

CANNO

T Deduct

Do not include the interest you paid for—

•

Personal interest (interest on car loans and

finance charges on credit cards).

• Service charges.

• Annual fees for credit cards.

• Loan fees.

• Credit investigation fees.

• Interest to purchase or carry tax-exempt

securities

Line 21d

Gifts to Charity

Note: Act 27, Session Laws of Hawaii 2018,

adopts the federal provisions that increases the

adjusted gross income limitation on cash con-

tributions from 50% to 60%, effective for contri-

butions made in tax years 2018 through 2025.

Complete Worksheet A-4 on page 38 to figure

your deduction for charitable contributions.

Contributions You CAN

Deduct

You may deduct what you gave to organi-

ations that are religious, charitable, educa-

tional, scientific, or literary in purpose. You

may also deduct what you gave to organiza-

tions that work to prevent cruelty to children

or animals. An organization that tells you it is

a “501(c)(3) organization” is telling you that it

falls into this category.

Examples of these organizations are:

• Churches, mosques, synagogues, temples,

etc.

• Boy Scouts, Boys and Girls Clubs of Amer-

ica, CARE, Girl Scouts, Goodwill Indus-

tries, Red Cross, Salvation Army, United

Way, etc.

• Fraternal orders, if the gifts will be used

for the purposes listed above.

• Veterans’ and certain cultural groups.

• Nonprofit hospitals and medical research

organizations.

• Most nonprofit educational organizations,

such as colleges, but only if your contribu-

tion is not a substitute for tuition or other

enrollment fees.

• Federal, state, and local governments if the

gifts are solely for public purposes.

Contributions can be in cash (including

checks and money orders), property, or out-

of-pocket expenses you paid to do volunteer

work for the kinds of organizations described

above. If you drove to and from the volunteer

work, you can take 14 cents a mile or the ac-

tual cost of gas and oil. Add parking and tolls

to the amount you claim under either method.

But don’t deduct any amounts that were re-

paid to you.

Gifts from which you benefit. If you made

a gift and received a benefit in return, such

as food, entertainment, or merchandise, you

may deduct only the amount that is more than

the value of the benefit. For example, if you

paid $70 to a charitable organization to attend

a fund-raising dinner and the value of the din-

ner was $40, you may deduct only $30.

If you do not know whether you can deduct

what you gave to an organization, check with

that organization.

Gifts of $250 or More. You can deduct a gift

of $250 or more only if you have a statement

from the charitable organization showing the

following information:

Page 20

• The amount of any money contributed and

a description (but not value) of any prop-

erty donated.

• Whether the organization did or did not

give you any goods or services in return

for your contribution. If you did receive

any goods or services, a description and

estimate of the value must be included. If

you received only intangible religious ben-

efits (such as admission to a religious cer-

emony), the organization must state this,

but it does not have to describe or value

the benefit.

In figuring whether a gift is $250 or more,

do not combine separate donations. For ex-

ample, if you gave your church $25 each week

for a total of $1,300, treat each $25 payment as

a separate gift. If you made donations through

payroll deductions, treat each deduction from

each paycheck as a separate gift. See federal

Publication 526 if you made a separate gift of

$250 or more through payroll deduction.

Note: You must get the statement by the date

you file your return or the due date (including

extensions) for filing your return, whichever is

earlier. Do not attach the statement to your re-

turn. Instead, keep it for your records.

Limit on the amount you can deduct. See

federal Publication 526 to figure the amount

of your deduction if any of the following ap-

plies:

• Your cash contributions, or contributions

of ordinary income property, are more

than 30% of your Hawaii adjusted gross

income.

• Your gifts of capital gain property are

more than 20% of your Hawaii adjusted

gross income.

• You gave gifts of property that increased in

value, or gave gifts of the use of property.

Contributions You CANNOT

Deduct

• An amount paid to or for the benefit of a

ollege or university in exchange for the

right to purchase tickets to an athletic

event in the college or university’s stadi-

um.

• Travel expenses (including meals and

lodging) while away from home perform-

ing donated services, unless there was no

significant element of personal pleasure,

recreation, or vacation in the travel.

• Political contributions.

• Dues, fees, or bills paid to country clubs,

lodges, fraternal orders, or similar groups.

• Cost of raffle, bingo, or lottery tickets.

• Value of your time or services.

• Value of blood given to a blood bank.

• The transfer of a future interest in tangible

personal property (generally until the en-

tire interest has been transferred).

• Gifts to:

a. Individuals and groups that are run for

personal profit.

b. Foreign organizations.

c. Organizations engaged in certain political

activities that are of direct financial inter-

est to your trade or business.

d. Groups whose purpose is to lobby for

changes in the law.

e. Civic leagues, social and sports clubs, la-

bor unions, and chambers of commerce.

• Value of benefits received in connection

with a contribution to a charitable orga-

nization.

• Cost of tuition.

Gifts by Cash or Check

On W

orksheet A-4, line 15, enter the total

contributions you made in cash or by check

(including out-of-pocket expenses).

Recordkeeping. For any contribution made

in cash, regardless of the amount, you must

maintain as a record of the contribution a bank

record (such as a canceled check or credit card

statement) or a written record from the char-

ity. The written record must include the name

of the charity, date, and amount of the con-

tribution. If you made contributions through

payroll deduction, see federal Publication 526

for information on the records you must keep.

Do not attach the record to your tax return. In-

stead, keep it with your other tax records.

Other Than by Cash or Check

On Worksheet A-4, line 16, enter the total

contributions you made other than by cash or

check. If you gave used items, such as clothing

or furniture, deduct their fair market value at

the time you gave them. Fair market value is

what a willing buyer would pay a willing sell-

er when neither has to buy or sell and both are

aware of the conditions of the sale. For more

details on determining the value of donated

property, see federal Publication 561.

If the amount of your deduction is more

than $500, you must complete and attach fed-

eral Form 8283. For this purpose, the “amount

of your deduction” means your deduction

before applying any income limits that could

result in a carryover of contributions. If you

deduct more than $500 for a contribution of a

motor vehicle, boat, or airplane, you must also

attach a statement from the charitable organi-

zation to your return. If your total deduction is

over $5,000 ($500 for certain contributions of

clothing and household items), you may also

have to get appraisals of the values of the do-

nated property. See federal Form 8283 and its

instructions for more information.

Contributions of clothing and household

items. A deduction for these contributions

will be allowed only if the items are in good

used condition or better. However, this rule

does not apply to a contribution of any single

item for which a deduction of more than $500

is claimed and for which you include a quali-

fied appraisal and federal Form 8283 with

your tax return.

Recordkeeping. If you gave property, you

should keep a receipt or written statement

from the organization you gave the property

to, or a reliable written record, that shows

the organization’s name and address, the date

and location of the gift, and a description of

the property. For each gift of property, you

should also keep reliable written records that

include:

• How you figured the property’s value at

the time you gave it. If the value was deter-

mined by an appraisal, keep a signed copy

of the appraisal.

• The cost or other basis of the property if

you must reduce it by any ordinary income

or capital gain that would have resulted if

the property had been sold at its fair mar-

ket value.

• How you figured your deduction if you

chose to reduce your deduction for gifts of

capital gain property.

• Any conditions attached to the gift.

Line 21e

Casualty and Theft Losses

Note: Act 27, Session Laws of Hawaii 2018,

does not adopt the federal provision that (1)

limits the personal casualty loss deduction for

property losses (not used in connection with a

trade or business or transaction entered into

for profit) to apply only to losses incurred as

a result of federally-declared disasters for

losses arising in tax years 2018 through 2025,

and (2) waives the requirement that casualty

losses from qualified disasters exceed 10% of

adjusted gross income to be deductible, and

that such losses must exceed $500.

Complete Worksheet A-5 on page 38 to figure

your deduction for casualty and theft losses.

Use line 21e to report casualty or theft

loss(es) of property that is not used in a trade

or business, or for income-producing purpos-

es. Complete the 2017 federal Form 4684, Ca-

sualties and Thefts, to figure your loss. Write

the amount from the 2017 federal Form 4684,

line 16 on line 19 of Worksheet A-5 on page 38,

fill in Worksheet A-5, and attach a copy of the

2017 federal Form 4684 to Form N-11.

Losses You CAN Deduct

You may be able to deduct part or all of each

oss caused by theft, vandalism, fire, storm, or

similar causes; car, boat, and other accidents;

and corrosive drywall. You may also be able

to deduct money you had in a financial insti-

tution but lost because of the insolvency or

bankruptcy of the institution.

If your property is covered by insurance,

you must file a timely insurance claim for

reimbursement of your loss. Otherwise, you

cannot deduct the loss as a casualty or theft

loss. However, the part of the loss that is not

covered by insurance is still deductible. You

can deduct personal casualty or theft losses

only to the extent that:

a. The amount of EACH separate casualty or

theft loss is more than $100, and

b. The total amount of ALL losses during the

year (reduced by the $100 limit) is more

than 10% of your adjusted gross income.

Corrosive drywall losses. If you paid for re-

pairs to your personal residence or household

appliances because of corrosive drywall, you

may be able to deduct those amounts paid. See

federal Publication 547 for details.

Page 21

Use Worksheet A-6, line 25, to deduct the

costs of proving that you had a property loss.

Examples of these costs are appraisal fees

and photographs used to establish the amount

of your loss.

Losses You CANNOT Deduct

• Money or property misplaced or lost.

•

Accidental breaking of articles such as

glassware or china under normal condi-

tions.

• Damage due to progressive deterioration

(steady weakening of a building due to nor-

mal wind and weather conditions; termite

or moth damage; damage or destruction of

trees, shrubs, or other plants by a fungus,

disease, insects, worms, or similar pests).

Line 21f

Miscellaneous Deductions

Note: Act 27, Session Laws of Hawaii 2018,

does not adopt the federal provision that sus-

pends all miscellaneous itemized deductions

that are subject to the 2% floor for tax years

2018 through 2025.

Complete Worksheet A-6 on page 38 to fig-

ure your miscellaneous deductions.

In General

Most miscellaneous deductions cannot be

deducted in full. You must subtract 2% of your

adjusted gross income from the total.

Generally, the 2% limit applies to job ex-

penses you paid for which you were not reim-

bursed (line 23). The limit also applies to tax

preparation fees (line 24) and certain expens-

es you paid to produce or collect taxable in-

come or certain tax-exempt income (line 25).

The 2% limit does not apply to certain other

miscellaneous expenses that you may de-

duct. These expenses can be deducted in full

on line 30. Gambling losses (to the extent of

winnings) and certain job expenses of handi-

capped employees can be deducted on line 30.

See the 2017 federal Publication 529, Miscel-

laneous Deductions, for more information.

Expenses Subject to the 2%

Limit

Employee Business Expenses

ote: The 2019 standard mileage rate for busi-

ness use of your vehicle is 58 cents a mile.

On Worksheet A-6, line 23, report job ex-

penses you paid for which you were not reim-

bursed. Complete the 2017 federal Form 2106

or 2106-EZ and attach it to Form N-11 if:

1. You claim any travel, transportation, meal,

or entertainment expenses for your job; or

2. Your employer paid you for any of your job

expenses reportable on Worksheet A-6, line

23.

Examples of expenses to include on line

23 of Worksheet A-6 are:

• Travel, transportation, meal, or entertain-

ment expenses.

• Union dues.

• Safety equipment, small tools, and sup-

plies you needed for your job.

• Uniforms required by your employer that

are not suitable for ordinary wear.

• Protective clothing required in your work,

such as hard hats, safety shoes, and glasses.

• Physical examinations required by your

employer.

• Dues to professional organizations and

chambers of commerce.

• Subscriptions to professional journals.

• Fees to employment agencies and other

costs to look for a new job in your present

occupation, even if you do not get a new

job.

• Certain business use of part of your home,

but only if you use that part regularly and

exclusively for business purposes and for

the convenience of your employer. For de-

tails, including limits that apply, see the

2017 federal Publication 587, Business Use

of Your Home.

• Certain education expenses you paid that

meet at least one of the following two tests.

1. The education is required by your em-

ployer or the law to keep your present sal-

ary, status, or job. The required education

must serve a bona fide business purpose

of your employer.

2. The education maintains or improves

skills needed in your present work.

Some education expenses are not deduct-

ible. See Expenses You MAY NOT Deduct on

this page.

Tax Preparation Fees

On Worksheet A-6, line 24, enter the fees you

paid for preparation of your federal and Ha-

waii tax return, including fees paid for filing

your return electronically.

Other Expenses

Note: Expenses and interest for royalties and

other income derived from any patents, copy-

rights, and trade secrets by an individual or

a qualified high technology business are de-

ductible.

On Worksheet A-6, line 25, enter the total

amount you paid to produce or collect tax-

able income and certain tax-exempt income

as stated in the above note, and manage or

protect property held for earning income. But

do not include any personal expenses. Attach

a statement showing the type and amount

of each expense to Form N-11. Examples of

these expenses are:

• Safe deposit box rental.

• Certain legal and accounting fees.

• Clerical help and office rent.

• Custodial (e.g., trust account) fees.

• Your share of the investment expenses of a

regulated investment company.

• Certain losses on nonfederally insured de-

posits in an insolvent or bankrupt financial

institution. For details, including limits

that apply, see the 2017 federal Publica-

tion 529.

• Casualty and theft losses of property used

in performing services as an employee.

• Deduction for repayment of amounts un-

der a claim of right. See Repayments in the

2017 federal Publication 525, Taxable and

Nontaxable Income, for more information.

• Convenience fee charged by the card pro-

cessor for paying your income tax (includ-

ing estimated tax payments) by credit or

debit card. The deduction is claimed for

the year in which the fee was charged to

your card.

Expenses NOT Subject to the

2% Limit

Other Deductions

List only the following expenses on Work-

sheet A-6, line 30:

• Gambling losses, but only to the extent of

gambling winnings reported on federal

Schedule 1 (Form 1040 or 1040-SR), line 8.

Note: Act 27, Session Laws of Hawaii 2018,

adopts the federal provision that defines

losses from wagering transactions to in-

clude any otherwise allowable deduction

incurred in carrying on wagering transac-

tions (e.g., traveling to and from a casino)

for tax years 2018 through 2025.

• Casualty and theft losses of income-pro-

ducing property.

• Hawaii estate and transfer tax.

• Amortizable bond premium on bonds ac-

quired before October 23, 1986.

• Certain unrecovered investment in an an-

nuity (IRC section 72(b)(3)). For details,

see the 2017 federal Publication 575, Pen-

sion and Annuity Income.

• Impairment-related work expenses of a

disabled person.

List the type and amount of each expense

and attach a copy of the list to your return.

Enter one total in the amount space for line

30. For more information on these expenses,

see the 2017 federal Publication 529, Miscel-

laneous Deductions.

Note: Repayments under a claim of right over

$3,000 are subject to the 2% limitation for Ha-

waii income tax purposes.

Expenses You MAY NOT

Deduct

Some expenses are not deductible at all. Ex-

mples are:

• Political contributions.

• Legal expenses for personal matters that

do not produce taxable income.

• Lost or misplaced cash or property.

• Expenses for meals during regular or ex-

tra work hours.

• The cost of entertaining friends.

• Commuting expenses.

• Travel expenses for employment away

from home if that period of employment

exceeds one year.

• Travel as a form of education.

• Expenses of attending a seminar, conven-

tion, or similar meeting unless it is related

to your employment.

Page 22

• Club dues.

• Expenses of adopting a child.

• Fines and penalties.

• Expenses of producing tax-exempt income,

except for expenses for royalties and other

income derived from any patents, copy-

rights, and trade secrets by an individual

or a qualified high technology business.

• Education that:

1. Is needed to meet the minimum educa-

tional requirements of your present trade

or business, or

2. Is part of a program of study that will

qualify you for a new trade or business.

Line 22

otal Itemized Deductions

Dependents

If your parent (or someone else) can claim

you as a dependent on his or her return (even

if that person chose not to claim you), fill in

the oval above line 21. If you are claiming the

standard deduction, see Standard Deduction

for Dependents on this page to figure your

standard deduction.

Itemized Deductions

Note: Act 27, Session Laws of Hawaii 2018,

does not adopt the federal provision that sus-

pends the overall limitation on itemized de-

ductions for tax years 2018 through 2025.

Note: Taxpayers with Hawaii adjusted gross

income above a certain amount will lose part

of their itemized deductions.

Your state income tax will be less if the total

of your itemized deductions is larger than the

standard deduction. To figure your itemized

deductions, fill in lines 21a to 21f.

Add lines 21a through 21f, and enter the re-

sult on line 22 if the amount on line 20 (Ha-

waii adjusted gross income) is $166,800 or

less ($83,400 if married filing separately).

You may not be able to deduct all of your

itemized deductions if the amount on line 20

(Hawaii adjusted gross income) is more than

$166,800 ($83,400 if married filing separate-

ly).

Use the Total Itemized Deductions Work-

sheet on page 38 to figure the amount you may

deduct.

Line 23

Standar

d Deduction

Note: Act 27, Session Laws of Hawaii 2018,

does not adopt the federal provision that in-

creases the standard deduction amounts for

tax years 2018 through 2025.

Taxpayers who do not itemize their deduc-

tions may reduce their adjusted gross income

by the amount of the standard deduction ap-

propriate to their filing status. The amount of

the standard deduction for each filing status

is as follows:

Filing Status Standard Deduction

Single $2,200

Married filing jointly 4,400

Married filing separately 2,200

Head of Household 3,212

Qualifying Widow(er) 4,400

Standard Deduction for Dependents. If you

can be claimed as a dependent by someone

else and you do not itemize your deductions,

your standard deduction is limited to the

greater of $500 or your earned income (up to

the full standard deduction for your filing sta-

tus). The standard deduction for an individual

who can be claimed as a dependent on the tax

return of another taxpayer is computed as fol-

lows:

A. Enter your earned income

(defined below). If none,

enter zero. ................................A.

B. Minimum amount ...................B. 500.00

C. Compare the amounts on

lines A and B above. Enter

the LARGER of the two

amounts here ..........................C.

D. Maximum amount. Enter

the full standard deduction for

your filing status, shown in

the chart above, here .............D.

E. Compare the amounts on

lines C and D above. Enter

the SMALLER of the two

amounts here and on

Form N-11, line 23. .................E.

Earned income includes wages, salaries,

tips, professional fees, and other compensation

received for personal services you performed.

It also includes any taxable scholarship or fel-

lowship grant. Generally, your earned income

is the total of the amounts you reported on fed-

eral Form 1040 or Form 1040-SR, line 1 (wag-

es), federal Schedule 1 (Form 1040 or 1040-

SR), lines 3 (business income) and 6 (farming

income), minus the amount, if any, on federal

Schedule 1 (Form 1040 or 1040-SR), line 14

(deduction for self-employment tax).

Line 24

Line 20 minus line 22 or 23, whichever ap-

lies. This line MUST be filled in. If line 24 is

a negative number, shade the minus (-) in the

box to the left of the amount boxes.

Line 25

Exemptions

Note: Act 27, Session Laws of Hawaii 2018,

does not adopt the federal provision that sus-

pends the deduction for personal exemptions

for tax years 2018 through 2025.

Caution: If you can be claimed as a dependent

on another person’s tax return, you may not

claim an exemption for yourself.

Regular Exemptions

Residents are allowed $1,144 for each ex-

emption they can claim. Multiply $1,144 by

the total number of exemptions you claimed

on line 6e.

Blind, Deaf, or Totally Disabled

— Deﬁ nition, Certiﬁ cation, and

Exemptions

Fill in the appropriate oval(s) on line 25

if you are blind, deaf or totally disabled and

your impairment has been certified. You must

submit a completed Form N-172 prior to filing

your return in order to claim this exemption.

If you do not, the exemption will be disal-

lowed and your return processed without the

disability exemption(s) claimed.

“Blind” means a person whose central vi-

sual acuity does not exceed 20/200 in the bet-

ter eye with correcting lenses, or whose visual

acuity is greater than 20/200 but is accompa-

nied by a limitation in the field of vision such

that the widest diameter of the visual field

subtends an angle no greater than 20 degrees.

“Deaf” means a person whose average loss

in the speech frequencies (500-2000 Hertz) in

the better ear is 82 decibels, A.S.A., or worse.

“Person totally disabled” means a person

who is totally and permanently disabled, ei-

ther physically or mentally, which results in

the person’s inability to engage in any sub-

stantial gainful business or occupation. It

is presumed that a person whose earned in-

come exceeds $30,000 for the taxable year is

engaged in a substantial, gainful business or

occupation.

The impairment of sight, deafness or dis-

ability shall be certified on the basis of a writ-

ten report on an examination performed by a

qualified ophthalmologist, qualified optom-

etrist or a qualified otolaryngologist, licensed

audiologist, or a qualified physician, as the

case may be, on Form N-172.

A blind, deaf or totally disabled person who

qualifies, may be allowed a Disability Exemp-

tion of $7,000. The Disability Exemption is

in lieu of the regular personal exemption of

$1,144. The following maximum exemptions

are allowed:

One Individual (any filing status) — $7,000

Taxpayer and Spouse (non-disabled

spouse under 65) — 8,144

Taxpayer and Spouse (non-disabled

spouse age 65 or over) — 9,288

Taxpayer and Spouse (both

disabled) — 14,000

Note: If you claim this special exemption you

will not be able to claim the additional exemp-

tions for your children or other dependents, or

for being 65 or older.

For more information, see Tax Information

Release No. 89-3, “State Tax Benefits Avail-

able to Persons with Impaired Sight, Impaired

Hearing, or Who are Totally Disabled.”

Also, see the administrative rules relating

to substantial gainful business or occupation

(section 18-235-1.14(d), HAR).

Line 26

Taxable Income

Line 24 minus line 25, but not less than zero.

Note: Act 27, Session Laws of Hawaii 2018,

does not adopt the federal provision that al-

lows a deduction for qualified business in-

come from a partnership, S corporation, or

sole proprietorship for tax years 2018 through

2025.

Page 23

Tax Computation

Line 27

Tax

To figure your tax, you will use one of the

following methods. Read the conditions below

to see which you should use, and fill in the

appropriate oval on line 27 if you use the tax

table, tax rate schedules, or alternative tax

on capital gains. Fill in the oval for tax from

the applicable forms if you use Form N-168 or

Form N-615. Then, go to the Tax Computation

Worksheet on page 39.

Tax Table

If your taxable income is less than $100,000,

you MUST use the Tax Table at tax.hawaii.

gov/forms/ to find your tax. Be sure you use

the correct column in the Tax Table. After

you have found the correct tax, enter that

amount. There is an example at the beginning

of the table to help you find the correct tax.

Tax Rate Schedules

You must use the Tax Rate Schedules on

page 42 to figure your tax if your taxable in-

come is $100,000 or more.

Form N-168

An individual engaged in a farming or fish-

ing business may elect to average their farm-

ing or fishing income over a three-year peri-

od. See Form N-168 for more information.

Form N-615

If a child under age 14 has unearned income

of more than $1,000, use Form N-615, Compu-

tation of Tax for Children Under Age 14 Who

Have Unearned Income of More than $1,000,

to see if any of the child’s unearned income is

taxed at the parent’s rate and, if so, to figure

the child’s tax. See Form N-615 for more in-

formation.

Alternative Tax on Capital Gains

If you have a net capital gain, you may be

able to reduce your tax using the Tax on Capi-

tal Gains Worksheet on page 39 if your taxable

income is over $48,000 ($24,000 for Single,

and Married Filing Separately; or $36,000 for

Head of Household classifications). If your

taxable income is $48,000 ($24,000 for Single,

and Married Filing Separately; or $36,000 for

Head of Household classifications) or under,

do not use the Tax on Capital Gains Worksheet

on page 39.

Some taxpayers will have Hawaii gain ad-

justments. Before filling in the worksheet, de-

termine whether you have adjustments from

the Hawaii Additions Worksheet on page 37,

e (gain adjustment), or j (other adjustments);

from the Hawaii Subtractions Worksheet on

page 37, j (certain income from a qualified

high technology business), or n (other ad-

justments); or from Form N-152 (lump sum

distribution from a pension plan). If you do,

separate the adjustments into long-term gain

adjustments for assets held for more than a

year, and short-term adjustments for assets

held for a year or less.

Total Tax Liability

Use the Tax Computation Worksheet on

page 39 to figure your total tax liability.

Refundable Credits

IMPORTANT! If the amount of payments plus

these credits is at least $1 more than your tax,

the difference will be refunded to you. It is

very important that you carefully read the fol-

lowing instructions for each of these credits to

ensure that you properly claim all the credits

to which you are entitled.

Line 28

Refundable Food/Excise Tax

Credit

If your federal adjusted gross income was

less than $50,000 (less than $30,000 if your fil-

ing status is Single), you may qualify for this

credit.

For more information, see Form N-311, Re-

fundable Food/Excise Tax Credit.

Note: Do not claim this credit if you are being

claimed or eligible to be claimed as a depen-

dent by any taxpayer for federal or Hawaii

income tax purposes.

To claim this credit. Complete Form N-311

and attach it to your return.

Deadline for claiming this credit. If you

are a calendar year taxpayer, the deadline to

claim the credit, including amended claims,

is December 31, 2020. If you are a fiscal year

taxpayer, the deadline to claim the credit, in-

cluding amended claims, is 12 months after

the close of your taxable year. You cannot

claim or amend the credit after the deadline.

Line 29

Credit for Low-Income

Household Renters

If you occupy and pay rent for real prop-

erty within the State as your residence, your

Hawaii adjusted gross income was less than

$30,000, and the rent you paid during 2019

was more than $1,000, you may qualify for

this credit. See the instructions for Schedule

X, Part I, on page 34.

Note: Do not claim this credit if you are being

claimed or eligible to be claimed as a depen-

dent by any taxpayer for federal or Hawaii

income tax purposes.

To claim this credit. Complete Schedule X,

Part I, and attach it to your return.

Deadline for claiming this credit. If you

are a calendar year taxpayer, the deadline to

claim the credit, including amended claims,

is December 31, 2020. If you are a fiscal year

taxpayer, the deadline to claim the credit, in-

cluding amended claims, is 12 months after

the close of your taxable year. You cannot

claim or amend the credit after the deadline.

Line 30

Credit for Child and

Dependent Care Expenses

Certain payments made for child and de-

pendent care (including payments made to the

State of Hawaii A+ Program) may be claimed

as a credit against your tax due. See the in-

structions for Schedule X, Part II, on page 35.

Note: Do not claim this credit if you are being

claimed or eligible to be claimed as a depen-

dent by any taxpayer for federal or Hawaii

income tax purposes.

To claim this credit. Complete Schedule X,

Part II, and attach it to your return.

Line 31

Credit f

or Child Passenger

Restraint System

Each taxpayer who files an individual in-

come tax return for the taxable year may

claim a tax credit for 2019 for the purchase

of one or more new child passenger restraint

systems which comply with federal motor ve-

hicle safety standards.

Note: This credit is $25 per return regardless

of the cost or the number of restraint systems

purchased.

To claim this credit. Enter $25 in line 31,

and attach a copy of the sales invoice, which

states the type of child restraint system pur-

chased, to your return.

Your claim for this credit may be rejected if

the invoice is not attached, or if 1) or 2) applies

but no statement or explanation is attached.

1) If the invoice doesn’t have your name on

it, you must attach a statement saying that

you and nobody else is claiming the credit

for the purchase described in the invoice.

2) If the invoice has somebody else’s name on

it, you must attach an explanation.

Deadline for claiming this credit. If you

are a calendar year taxpayer, the deadline to

claim the credit, including amended claims,

is December 31, 2020. If you are a fiscal year

taxpayer, the deadline to claim the credit, in-

cluding amended claims, is 12 months after

the close of your taxable year. You cannot

claim or amend the credit after the deadline.

Line 32

otal Refundable Tax Credits

from Schedule CR

If you are claiming any of the following

refundable tax credits, you must use Sched-

ule CR, Schedule of Tax Credits, to summa-

rize the total refundable tax credits claimed.

Complete Part II of Schedule CR, and enter

the amount from Schedule CR, line 28, on line

32. Attach Schedule CR directly behind Form

N-11.

The following refundable tax credits are in-

cluded on Schedule CR:

Page 24

Capital Goods Excise Tax

Credit

A 4% credit is available to Hawaii businesses

that acquire qualifying business property and

place it in service during the taxable year.

For more information, see the instructions

for Form N-312, Tax Information Release

No. 88-6, “Capital Goods Excise Tax Credit,”

Tax Information Release No. 88-8, “Capital

Goods Excise Tax Credit Recapture,” Tax In-

formation Release No. 89-4, “The Taxpayer

Who Is Entitled To The Capital Goods Excise

Tax Credit When The Parties Characterize A

Transaction As A Lease Or Sale-Leaseback,”

and Tax Information Release No. 2001-4,

“The Definition of “Cost”; The Payment of Tax

Requirement; and Safe Harbor Guidelines

Pertaining to the Capital Goods Excise Tax

Credit.”

To claim this credit. Complete Form N-312

and Schedule CR and attach them to your re-

turn.

Deadline for claiming this credit. If you

are a calendar year taxpayer, the deadline to

claim the credit, including amended claims,

is December 31, 2020. If you are a fiscal year

taxpayer, the deadline to claim the credit, in-

cluding amended claims, is 12 months after

the close of your taxable year. You cannot

claim or amend the credit after the deadline.

Fuel Tax Credit for

Commer

cial Fishers

Each principal operator of a commercial

fishing vessel who files an individual income

tax return may claim an income tax credit for

certain fuel taxes paid during the year.

To claim this credit. Complete Form N-163

and Schedule CR and attach them to your re-

turn.

Deadline for claiming this credit. If you

are a calendar year taxpayer, the deadline to

claim the credit, including amended claims,

is December 31, 2020. If you are a fiscal year

taxpayer, the deadline to claim the credit, in-

cluding amended claims, is 12 months after

the close of your taxable year. You cannot

claim or amend the credit after the deadline.

Motion Picture, Digital Media,

and Film Pr

oduction Income

Tax Credit

Note: Act 275, Session Laws of Hawaii 2019,

increases the annual cap for the motion pic-

ture, digital media, and film production in-

come tax credit to $50,000,000, effective for

taxable years beginning after December 31,

2018.

A taxpayer may claim an income tax credit

of (1) 20% of the qualified production costs

incurred before January 1, 2026, by a quali-

fied production in the City and County of Ho-

nolulu, and (2) 25% of the qualified produc-

tion costs incurred before January 1, 2026, by

a qualified production in the Kauai, Maui, or

Hawaii county. The total tax credits claimed

per qualified production shall not exceed

$15,000,000.

For more information, see Form N-340, Mo-

tion Picture, Digital Media, and Film Produc-

tion Income Tax Credit.

To claim this credit. Complete Form N-340

and Schedule CR and attach them to your re-

turn.

Deadline for claiming this credit. If you

are a calendar year taxpayer, the deadline to

claim the credit, including amended claims,

is December 31, 2020. If you are a fiscal year

taxpayer, the deadline to claim the credit, in-

cluding amended claims, is 12 months after

the close of your taxable year. You cannot

claim or amend the credit after the deadline.

Refundable Renewable

Ener

gy Technologies Income

Tax Credit (For Systems

Installed and Placed in

Service on or After July 1,

2009)

If you install and place in service an eli-

gible renewable energy technology system in

Hawaii, you may qualify to claim this credit.

You may claim the credit as nonrefundable or

refundable. For information on how to claim

the credit as nonrefundable, see the instruc-

tions for Nonrefundable Renewable Energy

Technologies Income Tax Credit on page 27. A

refundable credit means you will receive a tax

refund if your credit amount is greater than

the amount of income tax you owe. You may

elect to claim the credit as a refundable credit

under the following circumstances:

Reduced Credit

For a solar energy system such as a solar

water heater or photovoltaic system, you must

reduce the credit amount by 30% unless you

meet the conditions described in the “Full

Credit” paragraph below.

Full Credit

For a solar or wind energy system, you may

claim the full credit as a refundable credit if

you are an individual taxpayer and any of the

following apply:

(1) All your (and your spouse’s) income is

retirement income such as pension distribu-

tions, social security, or distributions from a

public retirement system that is exempt from

Hawaii income tax; or

(2) Your Hawaii adjusted gross income

(AGI) is $20,000 or less ($40,000 or less if you

are married filing a joint return).

Irrevocable Election

A taxpayer and spouse who do not file a

joint tax return shall only be entitled to make

this election to the extent that they would

have been entitled to make the election had

they filed a joint tax return.

Once an election is made to treat the tax

credit as refundable, the election cannot be

revoked. An amended return cannot be filed

to change the tax credit from refundable to

nonrefundable.

Total Output Capacity

A system classified under “other solar en-

ergy system” such as a photovoltaic system

must meet the total output capacity require-

ment to qualify for the credit unless an excep-

tion applies.

The total output capacity requirements are:

• Single-family residential property — 5

kilowatts per system

• Multi-family residential property — 0.360

kilowatts per unit per system

• Commercial property — 1,000 kilowatts

per system

For more information, see Form N-342 and

its instructions, and Tax Information Release

No. 2007-02, “Relating to the Renewable En-

ergy Technologies Income Tax Credit,” Tax

Information Release No. 2010-10, “Common

Income Tax & General Excise Tax Issues As-

sociated with the Renewable Energy Tech-

nologies Income Tax Credit, HRS §235-12.5,”

and Tax Information Release No. 2012-01,

“Temporary Administrative Rules Relating to

the Renewable Energy Technologies Income

Tax Credit.”

To claim this credit. Complete Form N-342

and Schedule CR and attach them to your re-

turn. Fill in the appropriate oval on Schedule

CR to indicate the type of energy system.

Deadline for claiming this credit. If you

are a calendar year taxpayer, the deadline to

claim the credit, including amended claims,

is December 31, 2020. If you are a fiscal year

taxpayer, the deadline to claim the credit, in-

cluding amended claims, is 12 months after

the close of your taxable year. You cannot

claim or amend the credit after the deadline.

Important Agricultural Land

Qualiﬁ

ed Agricultural Cost

Tax Credit

Note: The Department of Agriculture may

certify important agricultural land qualified

agricultural cost tax credits through the 2021

tax year.

If you are claiming the important agricul-

tural land qualified agricultural cost tax cred-

it, see Form N-344 for information.

To claim this credit. Complete Form N-344

and Schedule CR and attach them to your re-

turn.

Deadline for claiming this credit. If you

are a calendar year taxpayer, the deadline to

claim the credit, including amended claims,

is December 31, 2020. If you are a fiscal year

taxpayer, the deadline to claim the credit, in-

cluding amended claims, is 12 months after

the close of your taxable year. You cannot

claim or amend the credit after the deadline.

Tax Credit for Research

Activities

Note: A

ct 261, Session Laws of Hawaii 2019,

amends the Tax Credit for Research Activities

by extending the credit through 2024, allow-

ing the credit to be claimed for all qualified

research expenses incurred in Hawaii without

regard to the amount of expenses for previous

Page 25

years (base amount), and imposing an annual

cap of $5,000,000, effective for taxable years

beginning after December 31, 2019.

For taxable years from 2013 to 2019, each

qualified high technology business subject to

Hawaii’s income tax can claim an income tax

credit for qualified research activities equal to

the federal credit for increasing research ac-

tivities provided by IRC section 41, provided

that in order to qualify for this tax credit, the

qualified high technology business shall also

claim a federal tax credit for the same quali-

fied research activities under IRC section 41.

Qualified research expenses shall not include

research expenses incurred outside Hawaii.

To claim this credit. Complete Form N-346

and Schedule CR and attach them to your re-

turn. Form N-346A, which must be certified,

and your federal Form 6765 also must be at-

tached to your return.

Deadline for claiming this credit. If you

are a calendar year taxpayer, the deadline to

claim the credit, including amended claims,

is December 31, 2020. If you are a fiscal year

taxpayer, the deadline to claim the credit, in-

cluding amended claims, is 12 months after

the close of your taxable year. You cannot

claim or amend the credit after the deadline.

Other Credits

Pro Rata Share of Taxes Withheld

and Paid by a Partnership, Estate,

Trust, or S Corporation on the Sale

of Hawaii Real Property Interests

If the tax was withheld by a partnership,

estate, trust or S corporation, and you are tax-

able on a pro rata share of the entity’s gain on

the sale, include ONLY the amount of your pro

rata share of any net income taxes withheld

and paid by the partnership, estate, trust or S

corporation on Schedule CR, line 27a, and at-

tach a copy of the Schedule K-1 issued to you

by the partnership, estate, trust, or S corpora-

tion.

Note: If the partnership, estate, trust or S cor-

poration filed a Form N-288C, Application for

Tentative Refund of Withholding on Disposi-

tions by Nonresident Persons of Hawaii Real

Property Interests, you may not claim this

credit for your share of the amount being re-

funded to the entity.

Credit From a Regulated Investment

Company

A shareholder of a regulated investment

company is allowed a credit for the tax paid

to the State by the company on the amount of

capital gains which by IRC section 852(b)(3)

(D) is required to be included in the share-

holder’s return. The regulated investment

company will notify you of the undistributed

capital gains amount and the tax paid, if

any. If this credit applies to you, include the

amount on Schedule CR, line 27b, and attach

an explanation.

Line 34

Line 27 minus line 33. Enter the result on

his line.

If line 34 is a negative number, shade the

minus (-) in the box to the left of the amount

boxes.

If you are using nonrefundable credits to

offset your adjusted tax liability (line 34), the

total of the nonrefundable credits used cannot

be greater than your adjusted tax liability. If

line 34 is zero or less, nonrefundable tax cred-

its may not be used. Even if you are not able

to use the nonrefundable tax credits, complete

the forms for any tax credits you qualify for,

and attach the forms to your Form N-11. If the

forms are not attached, no claim for the tax

credit has been made, and you will lose the

carryover of your unused tax credits.

Nonrefundable Credits

Line 35

otal Nonrefundable Tax

Credits from Schedule CR

Note: If line 34 is zero or less, no tax credit

may be used. Enter zero on line 35.

If you are claiming any nonrefundable tax

credits, you must use Schedule CR, Schedule

of Tax Credits, to summarize the total nonre-

fundable tax credits claimed. Complete Part

I of Schedule CR, and enter the amount from

Schedule CR, line 20, on line 35. Attach Sched-

ule CR directly behind Form N-11. The follow-

ing nonrefundable tax credits are included on

Schedule CR:

Credit for Income Taxes Paid

to Other States and Countries

Note: I

f you claim a credit for income taxes

paid to other states and countries, you can-

not also claim those amounts as an itemized

deduction for state and foreign income taxes

paid to another state or foreign country.

If you have out-of-state income that is taxed

by another state or foreign country and also

by Hawaii, you may claim a credit against

your Hawaii income for the net income tax

you paid to the other state or foreign country

if you meet the following conditions:

• The income was earned while you were a

Hawaii resident (or you are married and

filing a joint resident return) and was not

exempt from Hawaii income tax;

• The income on which the state or foreign

tax is imposed was derived or received

from sources outside Hawaii;

• You were liable for and paid tax to the for-

eign jurisdiction (net amount of tax paid

to a foreign jurisdiction after all credits,

reductions, and refunds allowed or allow-

able by the laws of the foreign jurisdiction

have been deducted);

• The tax paid to the other state or foreign

country is an income-based tax that is im-

posed on both residents and nonresidents

of the other state or foreign country, rather

than a sales, gross receipts, withholding,

or value added tax (i.e., taxes withheld on

dividends paid from foreign investments

do not qualify);

• No credit is allowed if the foreign income

is excluded on the federal return;

• No credit is allowed if the foreign tax cred-

it is allowed on the federal return;

• The income must be taxed by the other

state or foreign country for the same tax-

able year for which the Hawaii credit is

claimed;

• No credit is allowed for penalties or inter-

est paid to the other state or foreign coun-

try; and

• No credit is allowed for city or local in-

come taxes paid to another state.

Out-of-State Tax Refund. If you claim this

credit and you later receive a tax refund from

the other state or foreign country, you MUST

report this to the Department. You may be sub-

ject to penalties if you fail to make this report.

For more information, see section 235-55,

HRS, and section 18-235-55, HAR.

To claim this credit. Complete the Other

State and Foreign Tax Credit Worksheet on

page 39. On line 5 of the worksheet, enter the

net amount of tax paid to the other state after

all credits, reductions, and refunds allowed or

allowable by the laws of the other state have

been deducted (net tax liability).

You must attach the following to your return:

• Schedule CR.

• If you entered any amount on line 5, you

must attach a copy of the tax return(s)

from the other state(s).

• If you entered any amount on line 6, you

must attach a copy of all federal Form(s)

1116 that you are filing this year. If you

are not required to file federal Form 1116,

attach a copy of the payee statement (such

as federal Form 1099-DIV or 1099-INT)

that you received for your foreign source

income.

Credit for Beneﬁ ciaries of Foreign

Trusts

Any resident beneficiary of a trust with a

situs in another State may claim a credit for

income taxes paid by the trust to the other

State on any income that is attributable to as-

sets other than intangibles. This credit is not

allowed for trusts that are resident in a for-

eign country (or in any territory or possession

of the United States).

The trust will inform you of what your

share of the trust’s income is, and how much

of it is long-term capital gains. Include these

amounts on lines 3 and 4, respectively, of the

Other State and Foreign Tax Credit Worksheet

on page 39.

The trust will also tell you your share of

the tax the trust paid to the other state. Find

out how much of the trust’s income was at-

tributable to real property and tangible per-

sonal property (not including stocks, bonds,

mortgages, and other intangibles). Divide

that number by the total amount of the trust’s

income, and multiply your share of the out-

of-state tax by that percentage. Include this

amount on line 5 of the Other State and For-

eign Tax Credit Worksheet on page 39.

Page 26

Credit for Shareholders of S

Corporations

A shareholder of an S corporation shall be

considered to have paid a tax imposed on the

shareholder in an amount equal to the share-

holder’s pro rata share of any net income tax

paid by the S corporation to a state which

does not measure the income of S corporation

shareholders by the income of the S corpora-

tion. The term “net income tax” means any

tax imposed on or measured by a corpora-

tion’s net income.

The S corporation will inform you of what

your share of its income is, and how much

of it is long-term capital gains. Include these

amounts on lines 3 and 4, respectively, of the

Other State and Foreign Tax Credit Worksheet

on page 39.

The S corporation will also tell you your

share of the tax paid to the other state. Include

this amount on line 5 of the Other State and

Foreign Tax Credit Worksheet on page 39.

Carryover of the Credit for

Ener

gy Conservation

Note: The credit for energy conservation ex-

pired on June 30, 2003. This credit may be

claimed only if you have a carryover of the tax

credit from a prior year.

Each individual resident taxpayer who files

an individual income tax return and who has

unused credits for energy conservation from

the prior year may claim a tax credit against

its individual income tax liability. Tax credits

that exceed the individual’s income tax li-

ability are not refunded but may be used as

a credit against the individual’s income tax

liability in subsequent years until exhausted.

For more information, see Form N-323, Car-

ryover of Tax Credits.

To claim the carryover of this credit. Com-

plete Form N-323 and Schedule CR and attach

them to your return.

See the discussion for the Renewable En-

ergy Technologies Income Tax Credit (For

Systems Installed and Placed in Service on or

After July 1, 2009), for the credit available for

current system installations.

Enterprise Zone Tax Credit

A qualified enterprise zone business may

laim a credit for a percentage of net income

tax due to the State attributable to the conduct

of business within a zone and a percentage of

the amount of unemployment insurance pre-

miums paid based on the payroll of employees

employed at the business firm establishments

in the zone. The applicable percentage is 80%

the first year; 70% the second year; 60% the

third year; 50% the fourth year; 40% the fifth

year; 30% the sixth year; and 20% the seventh

year. This credit is not refundable and any un-

used credit may NOT be carried forward.

For more information, see Form N-756, En-

terprise Zone Tax Credit.

To claim this credit. Complete Form N-756

and Schedule CR and attach them to your re-

turn.

Tax Credit for Low-Income

Housing

Note: D

o not confuse this credit with the credit

for low-income household renters.

Hawaii’s tax credit for low-income housing

is equal to 50% of the tax credit allocated by

the Hawaii Housing Finance and Develop-

ment Corporation for qualified buildings lo-

cated within the State of Hawaii.

Contact the Hawaii Housing Finance and

Development Corporation for qualifying re-

quirements and further information.

To claim this credit. Complete Form N-586

and Schedule CR and attach them to your re-

turn.

Deadline for claiming this credit. If you

are a calendar year taxpayer, the deadline to

claim the credit, including amended claims,

is December 31, 2020. If you are a fiscal year

taxpayer, the deadline to claim the credit, in-

cluding amended claims, is 12 months after

the close of your taxable year. You cannot

claim or amend the credit after the deadline.

Credit for Employment of

ocational Rehabilitation

Referrals

The amount of the tax credit for the taxable

year is equal to 20% of the qualified first-year

wages for that year. The amount of the quali-

fied first-year wages which may be taken into

account with respect to any individual shall

not exceed $6,000.

“Qualified wages” means the wages paid or

incurred by the employer during the taxable

year to an individual who is a vocational reha-

bilitation referral and more than one-half of

the wages paid or incurred for such an indi-

vidual is for services performed in a trade or

business of the employer.

“Qualified first-year wages” means, with re-

spect to any vocational rehabilitation referral,

qualified wages attributable to service ren-

dered during the one-year period beginning

with the day the individual begins work for

the employer.

The credit allowed shall be claimed against

net income tax liability for the taxable year.

A tax credit which exceeds the taxpayer’s

income tax liability may be used as a credit

against the taxpayer’s income tax liability in

subsequent years until exhausted.

For more information, see Form N-884,

Credit for Employment of Vocational Reha-

bilitation Referrals.

To claim this credit. Complete Form N-884

and Schedule CR and attach them to your re-

turn.

Deadline for claiming this credit. If you

are a calendar year taxpayer, the deadline to

claim the credit, including amended claims,

is December 31, 2020. If you are a fiscal year

taxpayer, the deadline to claim the credit, in-

cluding amended claims, is 12 months after

the close of your taxable year. You cannot

claim or amend the credit after the deadline.

Carryover of the High

echnology Business

Investment Tax Credit

Note: The high technology business invest-

ment tax credit is not available for invest-

ments made after December 31, 2010. You

may claim the tax credit only if you have a

carryover of the tax credit from a prior year.

Each taxpayer who files an individual in-

come tax return and who has unused high

technology business investment tax credits

may claim a tax credit against its individual

income tax liability. A tax credit which ex-

ceeds the taxpayer’s income tax liability may

be used as a credit against the taxpayer’s in-

come tax liability in subsequent years until

exhausted.

For more information, see Form N-323, Car-

ryover of Tax Credits.

To claim the carryover of this credit. Com-

plete Form N-323 and Schedule CR and attach

them to your return.

Carryover of the Individual

velopment Account

Contribution Tax Credit

Note: The individual development account

contribution tax credit is not available for tax-

able years beginning after December 31, 2004.

This credit may be claimed only if you have a

carryover of the tax credit from a prior year.

Each individual taxpayer who files an indi-

vidual income tax return and who has unused

credits for contributions of matching funds to

an individual development account from the

prior year may claim a tax credit against its

individual income tax liability. Tax credits

that exceed the individual’s income tax li-

ability are not refunded but may be used as

a credit against the individual’s income tax

liability in subsequent years until exhausted.

For more information, see Form N-323, Car-

ryover of Tax Credits.

To claim the carryover of this credit. Com-

plete Form N-323 and Schedule CR and attach

them to your return.

Carryover of the Technology

Infrastructure Reno

vation Tax

Credit

Note: The technology infrastructure renova-

tion tax credit is not available for taxable years

beginning after December 31, 2010. This credit

may be claimed only if you have a carryover of

the tax credit from a prior year.

Each individual taxpayer who files an indi-

vidual income tax return and who has unused

credits from the prior year for renovation

costs to provide a commercial building with

technology enabled infrastructure may claim

a tax credit against its individual income tax

liability. Tax credits that exceed the individu-

al’s income tax liability are not refunded but

may be used as a credit against the individu-

al’s income tax liability in subsequent years

until exhausted.

For more information, see Form N-323, Car-

ryover of Tax Credits.

Page 27

To claim the carryover of this credit. Com-

plete Form N-323 and Schedule CR and attach

them to your return.

School Repair and

Maintenance

Tax Credit

Licensed contractors, pest control operators,

and professional engineers, architects, survey-

ors and landscape architects who are subject to

Hawaii’s income tax may claim an income tax

credit for contributions of in-kind services for

the repair and maintenance of public schools.

The credit shall be an amount equal to 10% of

the value of the services contributed. Certain

other limitations and restrictions apply.

The credit allowed shall be claimed against

net income tax liability for the taxable year.

A tax credit which exceeds the taxpayer’s

income tax liability may be used as a credit

against the taxpayer’s income tax liability in

subsequent years until exhausted.

For more information, see Form N-330,

School Repair and Maintenance Tax Credit.

To claim this credit. Complete Form N-330

and Schedule CR and attach them to your re-

turn.

Deadline for claiming this credit. If you

are a calendar year taxpayer, the deadline to

claim the credit, including amended claims,

is December 31, 2020. If you are a fiscal year

taxpayer, the deadline to claim the credit, in-

cluding amended claims, is 12 months after

the close of your taxable year. You cannot

claim or amend the credit after the deadline.

Carryover of the Hotel

Construction and Remodeling

ax Credit

Note: T

he 10% nonrefundable hotel construc-

tion and remodeling tax credit may not be

claimed for qualified construction or renova-

tion costs incurred after June 30, 2003. This

credit may be claimed only if you have a car-

ryover of the tax credit from a prior year.

Each individual taxpayer who files an indi-

vidual income tax return and who has unused

credits for qualified construction or renova-

tion costs from the prior year may claim a tax

credit against its individual income tax liabil-

ity. Tax credits that exceed the individual’s

income tax liability are not refunded but may

be used as a credit against the individual’s

income tax liability in subsequent years until

exhausted.

For more information, see Form N-323, Car-

ryover of Tax Credits, and Tax Information

Release No. 2000-2, “Hotel Construction and

Remodeling Tax Credit.”

To claim the carryover of this credit. Com-

plete Form N-323 and Schedule CR and attach

them to your return.

Carryover of the Residential

Construction and Remodeling

ax Credit

Note: T

he residential construction and re-

modeling tax credit may not be claimed for

construction or renovation costs incurred af-

ter June 30, 2003. This credit may be claimed

only if you have a carryover of the tax credit

from a prior year.

Each individual taxpayer who files an indi-

vidual income tax return and who has unused

credits for qualified construction or renovation

costs from the prior year may claim a tax credit

against its individual income tax liability. Tax

credits that exceed the individual’s income tax

liability are not refunded but may be used as

a credit against the individual’s income tax li-

ability in subsequent years until exhausted.

For more information, see Form N-323, Car-

ryover of Tax Credits, and Tax Information

Release No. 2002-3, “Residential Construction

and Remodeling Tax Credit.”

To claim the carryover of this credit. Com-

plete Form N-323 and Schedule CR and attach

them to your return.

Carryover of the Renewable

Ener

gy Technologies Income

Tax Credit (For Systems

Installed and Placed in

Service Before July 1, 2009)

Note: This credit may be claimed only if you

have a carryover of the renewable energy

technologies income tax credit for systems

installed and placed in service before July 1,

2009.

Each taxpayer who files an individual in-

come tax return and who has unused renew-

able energy technologies income tax credits

for systems installed and placed in service

before July 1, 2009, may claim a tax credit

against its individual income tax liability.

A tax credit which exceeds the taxpayer’s

income tax liability may be used as a credit

against the taxpayer’s income tax liability in

subsequent years until exhausted.

For more information, see Form N-323, Car-

ryover of Tax Credits.

To claim the carryover of this credit. Com-

plete Form N-323 and Schedule CR and attach

them to your return.

See the discussion for the Renewable En-

ergy Technologies Income Tax Credit (For

Systems Installed and Placed in Service on or

After July 1, 2009), for the credit available for

current system installations.

Nonrefundable Renewable

nergy Technologies Income

Tax Credit (For Systems

Installed and Placed in Service

on or After July 1, 2009)

If you install and place in service an eligible

renewable energy technology system in Ha-

waii, you may qualify to claim this credit. You

may claim the credit as nonrefundable or re-

fundable. For information on how to claim the

credit as refundable, see the instructions for

Refundable Renewable Energy Technologies

Income Tax Credit on page 24. A nonrefund-

able credit means your credit will be applied

towards the amount of income tax you owe.

If your nonrefundable credit is greater than

the amount of income tax that you owe, then

you may carryover the remaining credit and

apply it towards next year’s income tax. You

may continue to carryover the credit until it

is used up.

Total Output Capacity

A system classified under “other solar en-

ergy system” such as a photovoltaic system

must meet the total output capacity require-

ment to qualify for the credit unless an excep-

tion applies.

The total output capacity requirements are:

• Single-family residential property — 5

kilowatts per system

• Multi-family residential property — 0.360

kilowatts per unit per system

• Commercial property — 1,000 kilowatts

per system

For more information, see Form N-342 and

its instructions, and Tax Information Release

No. 2007-02, “Relating to the Renewable En-

ergy Technologies Income Tax Credit,” Tax

Information Release No. 2010-10, “Common

Income Tax & General Excise Tax Issues As-

sociated with the Renewable Energy Tech-

nologies Income Tax Credit, HRS §235-12.5,”

and Tax Information Release No. 2012-01,

“Temporary Administrative Rules Relating to

the Renewable Energy Technologies Income

Tax Credit.”

To claim this credit. Complete Form N-342

and Schedule CR and attach them to your re-

turn. Fill in the appropriate oval on Schedule

CR to indicate the type of energy system. En-

ter the total credit amount claimed. Also enter

the carryover credit amount from prior years

included in the total amount claimed, if appli-

cable.

Deadline for claiming this credit. If you

are a calendar year taxpayer, the deadline to

claim the credit, including amended claims,

is December 31, 2020. If you are a fiscal year

taxpayer, the deadline to claim the credit, in-

cluding amended claims, is 12 months after

the close of your taxable year. You cannot

claim or amend the credit after the deadline.

Capital Infrastructure Tax

Credit

The capital infrastructure tax credit, which

elps tenants who were displaced by the Ka-

palama container terminal project, is effec-

tive for taxable years beginning after Decem-

ber 31, 2013. The credit will not be available

for taxable years beginning after December

31, 2019.

The tax credit is the lesser of 50% of the cap-

ital infrastructure costs paid or incurred by a

qualified infrastructure tenant during the tax-

able year or $2,500,000.

For more information, see Form N-348, Cap-

ital Infrastructure Tax Credit.

To claim this credit. Complete Form N-348

and Schedule CR and attach them to your re-

turn.

Deadline for claiming this credit. If you

are a calendar year taxpayer, the deadline to

claim the credit, including amended claims,

is December 31, 2020. If you are a fiscal year

taxpayer, the deadline to claim the credit, in-

Page 28

cluding amended claims, is 12 months after

the close of your taxable year. You cannot

claim or amend the credit after the deadline.

Cesspool Upgrade,

Conversion or Connection

Income Tax Credit

A taxpayer may claim a credit for the costs

to upgrade or convert a qualified cesspool into

a septic system or an aerobic treatment unit

system, or to connect a qualified cesspool to a

sewer system, effective for taxable years be-

ginning after December 31, 2015. The credit

will not be available for taxable years begin-

ning after December 31, 2020.

The tax credit is equal to the qualified ex-

penses of the taxpayer, up to a maximum of

(1) $10,000 per cesspool, or (2) $10,000 per

residential dwelling connected to a residential

large capacity cesspool.

For more information, see Form N-350,

Cesspool Upgrade, Conversion or Connection

Income Tax Credit.

To claim this credit. Complete Form N-350

and Schedule CR and attach them to your re-

turn.

Deadline for claiming this credit. If you

are a calendar year taxpayer, the deadline to

claim the credit, including amended claims,

is December 31, 2020. If you are a fiscal year

taxpayer, the deadline to claim the credit, in-

cluding amended claims, is 12 months after

the close of your taxable year. You cannot

claim or amend the credit after the deadline.

Renewable Fuels Production

ax Credit

Each taxpayer producing renewable fuels

ay claim a nonrefundable renewable fuels

production tax credit for taxable years begin-

ning after December 31, 2016, and before De-

cember 31, 2021.

The tax credit is the lesser of 20 cents per

76,000 British thermal units of renewable fu-

els using the lower heating value sold for dis-

tribution in Hawaii or $3,000,000 per taxable

year. The taxpayer’s production of renewable

fuels cannot be less than 2.5 billion British

thermal units of renewable fuels per year.

For more information, see Form N-352, Re-

newable Fuels Production Tax Credit.

To claim this credit. Complete Form N-352

and Schedule CR and attach them to your re-

turn.

Deadline for claiming this credit. If you

are a calendar year taxpayer, the deadline to

claim the credit, including amended claims,

is December 31, 2020. If you are a fiscal year

taxpayer, the deadline to claim the credit, in-

cluding amended claims, is 12 months after

the close of your taxable year. You cannot

claim or amend the credit after the deadline.

Organic Foods Production

ax Credit

A qualified taxpayer incurring qualified

xpenses associated with the production or

handling of organic foods may claim a nonre-

fundable organic foods production tax credit

for taxable years beginning after December

31, 2016, and before December 31, 2021.

The tax credit is 100% of qualified expenses

up to a maximum of $50,000 per qualified tax-

payer. The amount of tax credits certified in

any given tax year cannot exceed $2,000,000.

For more information, see Form N-354, Or-

ganic Foods Production Tax Credit.

To claim this credit. Complete Form N-354

and Schedule CR and attach them to your re-

turn.

Deadline for claiming this credit. If you

are a calendar year taxpayer, the deadline to

claim the credit, including amended claims,

is December 31, 2020. If you are a fiscal year

taxpayer, the deadline to claim the credit, in-

cluding amended claims, is 12 months after

the close of your taxable year. You cannot

claim or amend the credit after the deadline.

Earned Income Tax Credit

A qualifying individual taxpayer may claim

nonrefundable earned income tax credit

equal to 20 percent of the federal earned in-

come credit claimed on the taxpayer’s fed-

eral income tax return for taxable years 2018

through 2022.

A qualifying individual taxpayer is a taxpay-

er that: (1) files a federal income tax return

for the taxable year and claims the earned

income credit under IRC section 32, and (2)

files a Hawaii income tax return for the tax-

able year using the same filing status used on

the federal income tax return, and claiming

the same dependents claimed on the federal

income tax return.

For more information, see Form N-356,

Earned Income Tax Credit.

To claim this credit. Complete Form N-356

and Schedule CR and attach them to your re-

turn.

Deadline for claiming this credit. If you

are a calendar year taxpayer, the deadline to

claim the credit, including amended claims,

is December 31, 2020. If you are a fiscal year

taxpayer, the deadline to claim the credit, in-

cluding amended claims, is 12 months after

the close of your taxable year. You cannot

claim or amend the credit after the deadline.

Healthcare Preceptor Income

ax Credit

Act 43, Session Laws of Hawaii 2018, pro-

vides that a taxpayer may claim a new non-

refundable healthcare preceptor income tax

credit equal to $1,000 for each volunteer-

based supervised clinical training rotation su-

pervised by the taxpayer, up to a maximum of

$5,000 per taxable year, effective for taxable

years beginning after December 31, 2018.

For more information, see Form N-358,

Healthcare Preceptor Income Tax Credit.

To claim this credit. Complete Form N-358

and Schedule CR and attach them to your re-

turn.

Deadline for claiming this credit. If you

are a calendar year taxpayer, the deadline to

claim the credit, including amended claims,

is December 31, 2020. If you are a fiscal year

taxpayer, the deadline to claim the credit, in-

cluding amended claims, is 12 months after

the close of your taxable year. You cannot

claim or amend the credit after the deadline.

Line 36

Line 34 minus line 35. Enter the result on

this line.

If line 36 is a negative number, shade the

minus (-) in the box to the left of the amount

boxes.

Tax Already Paid

Line 37

Total Hawaii Income Tax

Withheld

Add the Hawaii income tax withheld as

shown on federal Form(s) W-2 and 1099-G

(unemployment compensation), State Form

N-2, and any other forms that show Hawaii

income tax withheld. Enter the total on this

line. Attach a copy of federal Form(s) W-2 and

1099-G, and Form N-2 showing the withhold-

ing. If not attached, the withholding may be

disallowed.

Note: If taxes were withheld on the sale of Ha-

waii real property, report this amount on line

38, “2019 Estimated Tax Payments.”

Line 38

2019 Estimated Tax Payments

Enter on this line your estimated Hawaii in-

ome tax payments made on Form N-200V for

2019. Do not include your 2018 overpayment

you requested to have applied to your 2019 es-

timated tax (this amount is to be reported on

line 39).

Also include on this line the amount of taxes

withheld on the sale of Hawaii real property

computed as follows:

1. Amount of taxes withheld as

shown on Form(s) N-288A,

“Statement of Withholding on

Dispositions by Nonresident

Persons of Hawaii Real

Property Interests” ................

2. Amount of refund you already

applied for on Form(s) N-288C,

“Application for Tentative

Refund of Withholding on

Dispositions by Nonresident

Persons of Hawaii Real

Property Interests” ................

3. Line 1 minus line 2. Include this

amount on Form N-11, line 38.

Note: Attach a copy of the Form(s) N-288A

showing the withholding.

If the tax was withheld for you through a

partnership, estate, trust, or S corporation,

see the Instructions for Pro Rata Share of Tax-

es Withheld and Paid by a Partnership, Estate,

Trust, or S Corporation on the Sale of Hawaii

Real Property Interests on page 25.

If you made estimated tax payments on

Forms N-200V or had tax withheld on the sale

Page 29

of Hawaii real property on Form N-288A for

yourself and your spouse under your social

security number but are now filing sepa-

rate returns, you can enter the total amount

paid with Forms N-200V or Form N-288A on

either of your separate returns or you and

your spouse can divide the payments in any

agreed amount. Use Form L-12, Request for

Allocation of Tax Amounts for Individuals, to

allocate the Forms N-200V or Form N-288A

payments between you and your spouse. Also

enter the social security numbers of both

spouses on the separate returns.

If you and your spouse each filed separate

Forms N-200V or have separate Forms N-

288A but are now filing a joint return, enter

the total paid with both Forms N-200V or

Forms N-288A on your joint return.

Follow the above instructions even if your

spouse died during the year.

Line 39

2018 Overpa

yment Applied to

2019 Estimated Tax

Enter on this line any overpayment from

your 2018 return that you applied to your 2019

estimated tax.

Line 40

Amount Paid with Extension

If you made an extension payment with

Form N-200V, enter the amount you paid on

this line.

If you made an extension payment for your-

self and your spouse under your social secu-

rity number on Form N-200V but are now fil-

ing separate returns, you can enter the total

amount paid with Form N-200V on either of

your separate returns or you and your spouse

can divide the payment in any agreed amount.

Use Form L-12, Request for Allocation of

Tax Amounts for Individuals, to allocate the

Form N-200V payment between you and your

spouse. Also enter the social security num-

bers of both spouses on the separate returns.

If you and your spouse each filed separate

Forms N-200V but are now filing a joint re-

turn, enter the total paid with both Forms N-

200V on your joint return.

Line 41

otal Payments

Add lines 37 through 40. Enter the amount

on this line.

Refund or Balance Due

Line 42

Amount Overpaid

If line 41 is larger than line 36, and line 36

is zero or more, subtract line 36 from line 41

and show the difference on line 42. This is the

amount overpaid.

However, if line 36 is less than zero, com-

plete the following worksheet:

1. Amount from line 36 (enter as

a positive number)..............

2. Amount from line 41. .........

3. Add line 1 and line 2. ..........

Enter the amount from line 3 of the work-

sheet on line 42. This is the amount overpaid.

If you have an underpayment of estimated

tax penalty on line 50, do not include the pen-

alty amount on this line. Your overpayment

will be reduced automatically by the amount

of the penalty.

Line 43a

Contrib

ution to the Hawaii

Schools Repairs and

Maintenance Fund

The Hawaii School-Level Minor Repairs

and Maintenance Special Fund provides mon-

eys for school-level minor repairs and mainte-

nance. If you have an overpayment of at least

$2 ($4 if married and filing a joint return), you

can choose to contribute to the Hawaii School-

Level Minor Repairs and Maintenance Spe-

cial Fund.

Fill in the appropriate oval(s) if you want to

contribute $2 to the Hawaii School-Level Mi-

nor Repairs and Maintenance Special Fund

(or $4 if you are filing a joint return and your

spouse also wants to contribute). No other

amounts can be accepted. Your contribution

will reduce your refund. Once made, the con-

tribution cannot be revoked.

Line 43b

Contrib

ution to the Hawaii

Public Libraries Fund

The Hawaii Public Libraries Special Fund

provides moneys to support the operations of

the library system. If you have an overpay-

ment of at least $5 ($10 if married and filing

a joint return), you can choose to contribute

to the Hawaii Public Libraries Special Fund.

Fill in the appropriate oval(s) if you want to

contribute $5 to the Hawaii Public Libraries

Special Fund (or $10 if you are filing a joint

return and your spouse also wants to contrib-

ute). No other amounts can be accepted. Your

contribution will reduce your refund. Once

made, the contribution cannot be revoked.

Line 43c

Contribution to the Domestic

and Sexual Violence / Child

Abuse and Neglect Funds

The Hawaii Children’s Trust Fund provides

moneys for the award of grants for primary

and secondary prevention activities to pre-

vent child abuse and neglect. The Domestic

Violence and Sexual Assault Special Fund

provides moneys for programs and grants or

purchases of service that support or provide

domestic violence and sexual assault inter-

vention or prevention. The Spouse and Child

Abuse Special Accounts provide moneys for

staff programs, and grants or purchases of

service that support or provide spouse or child

abuse intervention or prevention. If you have

an overpayment of at least $5 ($10 if married

and filing a joint return), you can choose to

contribute to these funds.

Fill in the appropriate oval(s) if you want to

contribute $5 to the Hawaii Children’s Trust

Fund, the Domestic Violence and Sexual As-

sault Special Fund, and the Spouse and Child

Abuse Special Accounts (or $10 if you are fil-

ing a joint return and your spouse also wants

to contribute). No other amounts can be ac-

cepted. Your contribution will reduce your

refund. Once made, the contribution cannot

be revoked.

Line 46

Applied to 2020 Estimated

Tax

Enter the amount from line 45 that you want

applied to your estimated tax for 2020.

If you have an underpayment of estimated

tax penalty on line 50, do not include the pen-

alty amount on this line. The amount applied

to your 2020 estimated tax will be reduced au-

tomatically by the amount of the penalty.

If you and your spouse filed a joint return

for 2019 but will file separate returns for 2020,

you can request that the 2020 estimated tax

be applied to either of your separate returns

or you and your spouse can divide the esti-

mated tax to be applied in any agreed amount.

Use Form L-12, Request for Allocation of Tax

Amounts for Individuals, to allocate the esti-

mated tax to be applied between you and your

spouse. Also enter the social security num-

bers of both spouses on the separate returns.

Line 47a

Refund

Line 45 minus line 46. This is the amount

hat will be refunded to you.

If you have an underpayment of estimated

tax penalty on line 50, do not include the pen-

alty amount on this line. The amount of your

refund will be reduced automatically by the

amount of the penalty.

Note: Fill in the oval under line 47a if the ulti-

mate destination of your refund is to a foreign

(non-U.S.) bank account. Do not complete

lines 47b through 47d. Due to rules for inter-

national ACH transactions, the direct deposit

of your refund into a foreign (non-U.S.) bank

account will not be available. A check will be

sent to you instead.

Note: If you are filing a Hawaii income tax

return for the first time, you will not be al-

lowed to have your refund directly deposited

into your checking or savings account. Do not

complete lines 47b through 47d. A check will

be sent to you instead.

Note: If you are filing your return after the

prescribed due date, the refund shown may

be limited or disallowed due to the statute of

limitations. In general, a claim for refund or

credit for overpaid income taxes must be filed

Page 30

within three years after the return is filed for

the taxable year, within three years of the due

date for filing the return, or within two years

from when the tax is paid, whichever is later.

For purposes of determining whether a refund

or credit is allowed, taxes paid on or before

the due date of the return (e.g., taxes withheld

from an employee’s pay, or estimated tax pay-

ments) are considered paid on the due date of

the return, without considering an extension

of time to file the return.

Lines 47b Through 47d

Direct Deposit of Refund

Complete lines 47b through 47d if you want

he Department to directly deposit the amount

shown on line 47a into your checking or sav-

ings account at a bank or other financial in-

stitution (such as a mutual fund, brokerage

firm, or credit union) instead of sending you

a check.

Note: If the ultimate destination of your re-

fund is to a foreign (non-U.S.) bank account,

do not complete lines 47b through 47d. See the

instructions for line 47a.

Note: If you are filing a Hawaii income tax re-

turn for the first time, do not complete lines

47b through 47d. See the instructions for line

47a.

Note: If you owe certain past-due debt, such

as child support, and all or part of the over-

payment on line 42 is used (offset) to pay the

past-due amount, you will not be allowed to

have your refund directly deposited into your

checking or savings account. A check will be

sent to you instead.

Why Use Direct Deposit?

• You get your refund fast – even faster if

you e-file!

• Payment is more secure – there is no check

to get lost.

• More convenient. No trip to the bank to

deposit your check.

• Saves tax dollars. A refund by direct de-

posit costs less than a check.

You can check with your financial institu-

tion to make sure your deposit will be accept-

ed and to get the correct routing and account

numbers. The Department is not responsible

for a lost refund if you enter the wrong ac-

count information.

If you file a joint return and fill in lines 47b

through 47d, you are appointing your spouse

as an agent to receive the refund. This ap-

pointment cannot be changed later.

Some financial institutions will not allow a

joint refund to be deposited into an individual

account. If the direct deposit is rejected, a

check will be sent instead. The Department

is not responsible if a financial institution re-

jects a direct deposit.

Routing Number

The routing number must be nine digits.

The first two digits must be 01 through 12 or

21 through 32. Otherwise, the direct deposit

will be rejected and a check sent instead.

Your check may state that it is payable

through a financial institution different from

the one at which you have your checking ac-

count. If so, do not use the routing number

on that check. Instead, contact your financial

institution for the correct routing number to

enter on line 47b.

Type of Account

On line 47c, fill in the applicable oval to in-

dicate whether you want your refund depos-

ited into your checking or savings account.

Account Number

Contact your financial institution for the

correct account number to enter on line 47d.

The account number can be up to 17 charac-

ters (both numbers and letters). Omit spaces,

hyphens, and special symbols. Enter the num-

ber from left to right and leave any unused

boxes blank. Be sure not to include the check

number.

Line 48

Balance Due

If line 36 is larger than line 41, the difference

is your balance due.

Note: If you include penalty and/or interest

for the late filing of your return with your pay-

ment, identify and enter these amounts on a

separate sheet of paper and attach to Form

N-11. Do not include the penalty and/or inter-

est amounts for the late filing of your return on

this line. Also, if you have an underpayment

of estimated tax penalty on line 50, do not in-

clude the penalty amount on this line.

Line 49

ayment Amount

Enter the amount of your payment, includ-

ing any penalty and interest. You can pay on-

line at hitax.hawaii.gov or by check or money

order payable to “Hawaii State Tax Collec-

tor.” Write your social security number, day-

time phone number, and “2019 Form N-11” on

your check or money order, and attach it to the

front of Form N-11.

Note: Form N-200V is no longer required when

making a payment with your return.

Note: If you cannot pay the full amount you

owe, you can request to enter a payment

agreement after you receive the billing notice.

Please be aware that penalty and interest con-

tinue to accrue on the unpaid tax amount even

though you have not received the billing no-

tice. Payments will be accepted and applied

to your tax liability; however, to ensure your

payments are applied correctly, your check or

money order must have: (1) your name clearly

printed on the check as it is printed on the

tax return (if filing a joint return, also print

your spouse’s name), (2) your social security

number (if filing a joint return, also write your

spouse’s social security number), (3) your

daytime phone number, and (4) the tax year

and form number you filed (e.g., 2019 N-11).

Line 50

Underpa

yment of Estimated

Tax Penalty

See the instructions for Penalties and Inter-

est on page 33 and Form N-210, Underpay-

ment of Estimated Tax by Individuals, Es-

tates, and Trusts, to see if you owe a penalty

for the underpayment of estimated taxes. If

you owe a penalty, enter the penalty amount

on Form N-11, line 50. Do not include the pen-

alty amount on lines 42, 46, 47a, or 48. If you

have an overpayment, your overpayment (and

the amount applied to your 2020 estimated tax

or the amount of your refund) will be reduced

automatically by the amount of the penalty. If

you have any taxes due, include the amount of

the penalty on line 49.

Fill in the oval at line 50 if Form N-210 is

attached.

Note: If you are a farmer or fisherman, you

may receive a penalty notice for underpaying

estimated tax even though you filed your re-

turn on time, attached Form N-210, and met

the gross income from farming or fishing re-

quirement. If you receive a penalty notice and

you think it is in error, write to the address on

the notice and explain why you think the no-

tice is in error. Include a computation showing

that you met the gross income from farming or

fishing requirement.

Amended Returns

If you are filing an amended return, fill in

he amended return oval at the top of Form

N-11. Complete your amended return using

corrected amounts through line 50. Attach

Schedule AMD, Explanation of Changes on

Amended Return, to the income tax return

Form N-11. Also attach all forms and state-

ments required to file a complete return. If

you are claiming any tax credits, remember

to attach the required forms, such as Schedule

CR and Schedule X, even if you claimed the

credits on the original return.

If you are filing an amended return due to a

farming net operating loss carryback, also fill

in the NOL Carryback oval and attach a copy

of your original federal income tax return for

the loss year.

If you are filing an amended return due to

an IRS adjustment, also fill in the IRS Adjust-

ment oval.

See page 33 of the instructions for more in-

formation.

Line 51

Amount P

aid (Overpaid) on

Original Return

Enter on line 51 the amount paid on your

riginal 2019 Form N-11, line 48 (plus the

amount of estimated tax penalty on line 50, if

any); or the amount overpaid on your original

2019 Form N-11, line 42 (less the amount of

estimated tax penalty on line 50, if any). If the

amount is an overpayment, shade the minus

(-) in the box to the left of the amount boxes.

Page 31

Attach Schedule AMD, Explanation of

Changes on Amended Return. Also attach all

forms and statements required to file a com-

plete return. If you are claiming any tax cred-

its, remember to attach the required forms,

such as Schedule CR and Schedule X, even if

you claimed the credits on the original return.

Line 52

Balance Due (Refund) With

Amended Return

If no amount was entered on line 51, enter

on line 52 the amount, if any, from line 47a

(less the amount of estimated tax penalty on

line 50, if any) or line 48 (plus the amount of

estimated tax penalty on line 50, if any) of the

amended return.

If there is an amount on line 51, complete

one of the worksheets below. When complet-

ing the worksheet, enter all amounts as posi-

tive numbers.

If there is an amount on line 51 and that

amount is:

a. A payment and there is an amount on line

42, complete the following worksheet:

1. Amount from line 42 (less

the amount of estimated tax

penalty on line 50, if any) ..

2. Amount from line 51 ..........

3. Add line 1 and line 2 ..........

Enter the amount from line 3 of the work-

sheet on line 52. This is the amount of your

overpayment on your amended return. Shade

the minus (-) in the box to the left of the

amount boxes.

b. A payment and there is an amount on line

48, complete the following worksheet:

1. Amount from line 48 (plus

the amount of estimated tax

penalty on line 50, if any) ..

2. Amount from line 51 ..........

3. Line 1 minus line 2 .............

Enter the amount from line 3 of the work-

sheet on line 52.

If the amount on line 1 of the worksheet is

larger than the amount on line 2 of the work-

sheet, this is the amount you owe on your

amended return.

If the amount on line 2 of the worksheet is

larger than the amount on line 1 of the work-

sheet, this is the amount of your overpayment

on your amended return. Shade the minus (-)

in the box to the left of the amount boxes.

c. An overpayment and there is an amount on

line 42, complete the following worksheet:

1. Amount from line 42 (less

the amount of estimated tax

penalty on line 50, if any) ..

2. Amount from line 51 ..........

3. Line 1 minus line 2 .............

Enter the amount from line 3 of the work-

sheet on line 52.

If the amount on line 1 of the worksheet is

larger than the amount on line 2 of the work-

sheet, this is the amount of your overpayment

on your amended return. Shade the minus (-)

in the box to the left of the amount boxes.

If the amount on line 2 of the worksheet is

larger than the amount on line 1 of the work-

sheet, this is the amount you owe on your

amended return.

d. An overpayment and there is an amount on

line 48, complete the following worksheet:

1. Amount from line 48 (plus

the amount of estimated tax

penalty on line 50, if any) ..

2. Amount from line 51 ..........

3. Add line 1 and line 2 ..........

Enter the amount from line 3 of the work-

sheet on line 52. This is the amount you owe

on your amended return.

If you have an overpayment on your amend-

ed return, you may contribute to the (1) Hawaii

Schools Repairs and Maintenance Fund (line

43a) if line 43a on your original return was

blank, (2) Hawaii Public Libraries Fund (line

43b) if line 43b on your original return was

blank, and/or (3) Domestic and Sexual Vio-

lence/Child Abuse and Neglect Funds (line 43c)

if line 43c on your original return was blank.

Subtract the amount contributed to the

above funds from the amount of overpayment

available and enter the difference on line 52.

Shade the minus (-) in the box to the left of

the amount boxes. Be sure that the sum of the

amounts entered on lines 43a, 43b, 43c, and 52

is not more than the overpayment available.

If you have an amount due on your amended

return, send your payment to the Department

by attaching your check or money order to

the front of Form N-11. Write your social se-

curity number, daytime phone number, and

“2019 Amended Form N-11” on your check or

money order.

Attach Schedule AMD, Explanation of

Changes on Amended Return. Also attach all

forms and statements required to file a com-

plete return. If you are claiming any tax cred-

its, remember to attach the required forms,

such as Schedule CR and Schedule X, even if

you claimed the credits on the original return.

Taxpayer Questionnaire

All taxpayers MUST

complete lines 53, 54,

and 55.

Line 53

Schedule C

If you filled in Schedule C or Schedule C-EZ

for federal Form 1040 (for taxpayers receiving

income from operating a business or practicing

a profession as a sole proprietorship), check

“Yes.” If you checked “No,” go on to line 54.

Hawaii Gross Receipts

Enter your Hawaii gross receipts or sales,

net of returns and allowances. This will be the

Hawaii amount from Schedule C, line 3; or

Schedule C-EZ, line 1. If you do not have any

Hawaii gross receipts or sales, enter zero (0).

If you filed more than one Schedule C, enter

the total of your Hawaii gross receipts.

Main Business Activity and Product

Report the business activity that accounted

for the most gross income included here. Also,

enter the business product or service. For ex-

ample, business activity: wholesale, business

product: groceries; or business activity: retail,

business product: hardware.

Hawaii Tax Identiﬁ cation Number

If you are operating a business or practic-

ing a profession as a sole proprietorship in

Hawaii, enter your Hawaii Tax Identification

Number for this activity. If you are not operat-

ing a business or practicing a profession as a

sole proprietorship in Hawaii, and do not have

a Hawaii Tax Identification Number for this

activity, leave the boxes blank.

If more than one identification number ap-

plies, enter the identification number that ac-

counted for the most gross income included

here. On a separate sheet, list the other iden-

tification number(s), along with the Hawaii

gross receipts, main business activity, and

main business product relating to that identi-

fication number(s).

Line 54

Rents on Schedule E

If you received rental income and reported

it on Schedule E, federal Form 1040, check

“Yes.” If you checked “No,” go on to line 55.

Hawaii Gross Receipts

Enter your Hawaii gross rents. In most

cases, this will be the Hawaii amount from

Schedule E, line 3. If you do not have any Ha-

waii gross rents, enter zero (0).

If you filed more than one Schedule E, enter

the total of your Hawaii gross rents.

Hawaii Tax Identiﬁ cation Number

If you received rental income from prop-

erty located in Hawaii, enter your Hawaii Tax

Identification Number for this activity, even

if you wrote the same number down on line

53. If you did not receive rental income from

property located in Hawaii, and do not have

a Hawaii Tax Identification Number for this

activity, leave the boxes blank.

If more than one identification number ap-

plies, enter the identification number that

accounted for the most gross rents included

here. On a separate sheet, list the other iden-

tification number(s), along with the Hawaii

gross rents relating to that identification

number(s).

Line 55

Schedule F

If you completed Schedule F for federal

orm 1040 (for those receiving farming in-

come), check “Yes.” If you checked “No,” go

to Step 7 on page 32.

Hawaii Gross Receipts

Enter your Hawaii gross receipts or sales,

net of returns and allowances. This will be

the Hawaii amount from Schedule F, line 9. If

Page 32

you do not have any Hawaii gross receipts or

sales, enter zero (0).

Main Business Activity and Product

Report the business activity that accounted

for the most gross income included here. Also,

enter the business product or service. For ex-

ample, business activity: ranching, business

product: cattle.

Hawaii Tax Identiﬁ cation Number

If you are operating a farm in Hawaii, en-

ter your Hawaii Tax Identification Number

for this activity, even if you wrote the same

number down on line 53 or 54. If you are not

operating a farm in Hawaii, and do not have

a Hawaii Tax Identification Number for this

activity, leave the boxes blank.

If more than one identification number ap-

plies, enter the identification number that ac-

counted for the most gross income included

here. On a separate sheet, list the other iden-

tification number(s), along with the Hawaii

gross receipts, main business activity, and

main business product relating to that identi-

fication number(s).

Now continue with Step 7

belo

Step 7

Check your return to make

sure it is correct.

Step 8

Third Party Designee

If you want to authorize the Department to

iscuss the processing of your tax return with

a person that you designate, enter the name of

your third party designee, telephone number,

and identification number. You are authoriz-

ing the Department to call your third party

designee to answer any questions that may

arise during the processing of your tax return.

This designation does not allow your third

party designee to call the Department for in-

formation about the processing of your return

or for other issues relating to your return.

Note: This designation is not a full power of

attorney and does not replace Form N-848.

Step 9

Hawaii Election Campaign Fund

(For Hawaii State and County Elections)

This Fund supports the Hawaii Campaign

Spending Commission, a watchdog agency

that works to ensure that all campaign dona-

tions and expenditures are made public and

comply with campaign finance laws to pre-

vent corruption in politics. The Fund also

supports the public financing of political cam-

paigns which makes qualified candidates less

dependent on private special interest donors

to fund their campaigns.

If you have a tax liability of at least $3 ($6

if married and filing a joint return), you can

choose to contribute to the Hawaii Election

Campaign Fund. If you fill in the “Yes” oval,

$3 will go to the Hawaii Election Campaign

Fund. If you are filing a joint return, and your

spouse wants $3 to go to the Fund, fill in the

second “Yes” oval.

Filling in “Yes” will not increase your tax or

reduce your refund.

Once made, the designation cannot be re-

voked for this taxable year.

See the Hawaii Campaign Spending Com-

mission website at hawaii.gov/campaign or

call 808-586-0285 for more information.

Step 10

Sign and date y

our return.

Form N-11 is not considered a valid return

unless you sign it. If you are unable to sign the

return (due to disease or injury, etc.), you can

appoint an agent to sign your return. A return

signed by an agent must have a power of at-

torney attached that authorizes the agent to

sign for you. You can use Form N-848, Power

of Attorney.

Be sure to date your return. If you have

someone else prepare your return, you are still

responsible for the correctness of the return.

Joint Return. Your spouse must also sign

Form N-11 if it is a joint return. If your spouse

cannot sign because of disease or injury and

tells you to sign, you can sign your spouse’s

name in the proper space on the return fol-

lowed by the words “By (your name), Spouse.”

Be sure to also sign in the space provided for

your signature. Attach a dated statement,

signed by you, to the return. The statement

should include the form number of the return

you are filing, the tax year, and the reason

your spouse cannot sign, and that your spouse

has agreed to your signing for him or her.

If you are the guardian of your spouse who

is mentally incompetent, you can sign the re-

turn for your spouse as guardian.

If your spouse is unable to sign the return

because he or she is serving in a combat zone,

and you do not have a power of attorney or

other statement, you can sign for your spouse.

Attach a signed statement to your return that

explains that your spouse is serving in a com-

bat zone.

If your spouse cannot sign the joint return

for any other reason, you can sign for your

spouse only if you are given a valid power of

attorney. Attach the power of attorney to your

tax return.

If you are filing a joint return as the surviv-

ing spouse, see Death of Taxpayer on page 6.

Child’s Return. If your child cannot sign the

return, sign your child’s name in the space

provided. Then, add “By (your signature),

parent for minor child.”

Occupation. Write your occupation in the

space provided. If married and filing a joint

return, also write your spouse’s occupation in

the space provided.

Step 11

Did you have someone else

prepare your return?

If you fill in your own return, the Paid Pre-

parer’s space should remain blank. If some-

one prepares your return and does not charge

you, that person should not sign your return.

Generally, anyone who is paid to prepare

your tax return must sign your return and fill

in the other blanks in the Paid Preparer’s In-

formation area of your return. The preparer

may furnish his or her alternative identify-

ing number for income tax return preparers

(PTIN) instead of his or her social security

number.

If you have questions about whether a pre-

parer is required to sign your return, please

contact our Taxpayer Services staff.

The preparer required to sign your return

MUST complete the required preparer infor-

mation and:

• Sign it in the space provided for the pre-

parer’s signature.

• Give you a copy of your return in addition

to the copy to be filed with the Department.

Hawaii conforms to Internal Revenue Ser-

vice Notice 2004-54 which authorizes paid tax

return preparers to sign tax returns by means

other than by hand.

For more information, see Department of

Taxation Announcement No. 2009-33, “Con-

formity to Internal Revenue Service Notice

2004-54, Relating to Alternative Methods of

Signatures for Paid Tax Return Preparers.”

Step 12

Attachments

Reminder: Federal Schedules C, E, and F

are not required to be attached to Form N-11.

However, keep these schedules with your re-

cords until the statute of limitations runs out

for that return.

Attach a copy of your Form(s) HW-2 and

N-2, or federal Form(s) W-2 and 1099-G (un-

employment compensation), to the front of

Form N-11 in the area designated. To the back

of your return attach, in the following order:

• Schedule CR.

• Any other schedules, in alphabetical order.

• Other Hawaii – series forms, in numerical

order.

• Any other federal forms, in numerical or-

der, used as a substitute for state forms

(see Related Federal/Hawaii Tax Forms

on page 3).

• Any other required statements.

A return without the required forms and

statements is incomplete. You must file a

complete return on time to avoid paying pen-

alties and interest for late filing.

If you need more space on forms or sched-

ules, attach separate sheets and use the same

arrangement as the printed forms. But show

your totals on the printed forms. Please use

Page 33

sheets that are the same size as the forms and

schedules. Be sure to put your name and social

security number on these separate sheets.

If you owe tax, be sure to send your payment

to the Department by attaching your check or

money order to the front of Form N-11.

Reminders

ocessing of Your Tax Return

In general, refunds due to you are issued

within eight weeks from the date your return

is filed with the Department. However, it may

take additional time if you filed your return

close to the April 20 filing deadline, if errors

were made in completing your return, or you

moved and did not change your address with

the Department by completing Form ITPS-

COA, Change of Address Form.

You may check your refund status through

the Department’s website. You may also call

our Taxpayer Services Branch to obtain au-

tomated information about your individual

income tax refunds 24 hours a day, 7 days a

week. Automated refund information should

be available four to six weeks after your re-

turn is filed with the Department. See page

6 for the Department’s website address and

telephone numbers.

Penalties and Interest

Late Filing of Return.

The penalty for fail-

ure to file a return on time is assessed on the

tax due at a rate of 5% per month, or part of a

month, up to a maximum of 25%.

Extensions. If you are unable to file your

Hawaii tax return by April 20, 2020, you are

automatically granted a 6-month extension

without the need to file anything with the De-

partment unless an additional tax payment

must be made. As long as the following condi-

tions are met, you are deemed to have made

an application for the 6-month extension to

file an income tax return on the prescribed

due date:

1. On or before April 20, 2020, 100% of the

properly estimated tax liability is paid;

2. The tax return is filed on or before the expi-

ration of the 6-month extension period;

3. The tax return is accompanied by full pay-

ment of any tax not already paid; and

4. A court has not ordered you to file the tax

return on or before the prescribed due date.

Properly estimated tax liability means you

made a bona fide and reasonable attempt to

locate and gather all of the necessary informa-

tion to make a proper estimate of tax liability

for the taxable year.

If you must make an additional payment

of tax on or before April 20, 2020 in order

to meet the condition requiring payment of

100% of the properly estimated tax liability,

file Form N-200V with your payment. Federal

Form 4868, Application for Automatic Exten-

sion of Time To File U.S. Individual Income

Tax Return, may not be used in lieu of Form

N-200V.

Interest. Interest at the rate of 2/3 of 1% per

month or part of a month shall be assessed on

unpaid taxes and penalties beginning with the

first calendar day after the date prescribed

for payment, whether or not that first calen-

dar day falls on a Saturday, Sunday, or legal

holiday.

Failure to pay tax after filing timely re-

turns. The penalty for failure to pay the tax

after filing a timely return is 20% of the tax

unpaid within 60 days of the prescribed due

date.

Underpayment of estimated taxes. You may

be subject to a penalty for not paying enough

estimated tax if the total of your withholding

and timely estimated tax payments were less

than the smaller of:

1. 60% of your 2019 tax, or

2. 100% of your 2018 tax. Your 2018 tax return

must cover a 12-month period.

There are special rules for farmers and fish-

ermen.

For more information, see Form N-210, Un-

derpayment of Estimated Tax by Individuals,

Estates, and Trusts.

Change of Address

If your mailing address has changed, you

ust notify the Department of the change by

completing Form ITPS-COA, Change of Ad-

dress Form, or log in to your Hawaii Tax On-

line account at hitax.hawaii.gov. Failure to

do so may prevent your address from being

updated, any refund due to you from being de-

livered (the U.S. Postal Service is not permit-

ted to forward your State refund check), and

delay important notices or correspondence to

you regarding your return.

How Long Should Records Be

Kept?

Keep records of income, deductions, and

redits shown on your tax return, as well as

any worksheets you used, until the statute of

limitations runs out for that return. Usually

this is three years from the date the return

was due or filed, whichever is later. Also keep

copies of your filed tax returns and any fed-

eral Forms W-2 or 1099 you received as part of

your records. You should keep some records

longer. For example, property records (in-

cluding those on your home) should be kept as

long as they are needed to figure the basis of

the original or replacement property.

Amended Return

If you file your income tax return and later

become aware of any changes you must make

to income, deductions, or credits, you may file

an amended return on Form N-11 to change

the Form N-11 you already filed. Use the Form

N-11 for the year you are amending. (You can-

not file a 2018 amended return on a 2019 Form

N-11.) Fill in the amended return oval at the

top of Form N-11, and fill in the return with

all of the correct information. Attach Schedule

AMD, Explanation of Changes on Amended

Return, to Form N-11. Also attach all forms

and statements required to file a complete

return. If you are claiming any tax credits,

remember to attach the required forms, such

as Schedule CR and Schedule X, even if you

claimed the credits on the original return.

If you contributed to the Hawaii Schools Re-

pairs and Maintenance Fund, Hawaii Public

Libraries Fund, and/or Domestic and Sexual

Violence/Child Abuse and Neglect Funds on

your original return, your contribution(s) can-

not be revoked, and you must make the same

designation(s) on your amended return.

If you did not contribute to the Hawaii

Schools Repairs and Maintenance Fund, Ha-

waii Public Libraries Fund, and/or Domestic

and Sexual Violence / Child Abuse and Neglect

Funds on your original return, you may con-

tribute to these funds on an amended return

filed within twenty months and ten days after

the due date for the original return for such

taxable year. Once made, the contribution can-

not be revoked.

If you are filing an amended return due to a

farming net operating loss carryback, also fill

in the NOL Carryback oval and attach a copy

of your original federal income tax return for

the loss year.

If you are filing an amended return due to

an IRS adjustment, also fill in the IRS Adjust-

ment oval. See Change in Federal Taxable In-

come, below.

See the instructions for Form N-11, lines 51

and 52.

For information on the statute of limitation

periods within which you may file an amend-

ed return to claim a refund or credit of over-

paid taxes, see the instructions for Form N-11,

line 47a (Refund) on page 29.

You can get prior year forms from our web-

site, by calling our Taxpayer Services Branch,

and at any district tax office. See page 6 for

the Department’s website address and for the

phone number to request the forms you need.

If your original return was filed on an incor-

rect form, file an original return on the correct

form. For example, if you filed an original re-

turn on Form N-11 and should have filed Form

N-15, file an original return on Form N-15.

Change in Federal Taxable Income

In general, a change to your federal return,

whether it is made by you (on federal Form

1040X) or by the Internal Revenue Service,

must be reported to the State of Hawaii.

1) Section 235-101(b), HRS, requires a report

(an amended return) to the Director of Tax-

ation if the amount of IRC taxable income

is changed, corrected, adjusted or recom-

puted as stated in (3).

2) This report must be made:

a) Within 90 days after a change, correction,

adjustment or recomputation is finally

determined.

b) Within 90 days after an amended federal

return is filed.

3) A report within the time set out in (2) is re-

quired if:

a) The amount of taxable income (includ-

ing the federal earned income credit) as

returned to the United States is changed,

corrected, or adjusted by an officer of the

United States or other competent author-

ity.

Page 34

b) A change in taxable income results from

a renegotiation of a contract with the Unit-

ed States or a subcontract thereunder.

c) A recomputation of the income tax im-

posed by the United States under the

Internal Revenue Code results from any

cause.

d) An amended income tax return is made

to the United States.

4) The report referred to above shall be in the

form of an amended Hawaii income tax re-

turn.

5) The statutory period for the assessment of

any deficiency or the determination of any

refund attributable to the report shall not

expire before the expiration of one year

from the date the Department is notified by

the taxpayer or the Internal Revenue Ser-

vice, whichever is earlier, of such a report

in writing. Before the expiration of this one-

year period, the Department and the tax-

payer may agree in writing to the extension

of this period. The period so agreed upon

may be further extended by subsequent

agreements in writing made before the

expiration of the period previously agreed

upon.

Instructions for

chedule X — Tax Credits

Note: Use Form N-311 to claim the refundable

food/excise tax credit.

Purpose

Use Schedule X to claim the credit for low-

income household renters and the credit for

child and dependent care expenses. You may

qualify to claim these credits, and receive a

refund, even if you have no taxable income.

If you claim any of the tax credits, both pages

of Schedule X must be attached to your Form

N-11.

Part I

Credit for Low-Income

Household Renters

Each resident taxpayer who occupies and

pays rent for real property within the State

as his or her residence and who files an in-

dividual income tax return for the taxable

year, including those who have no income or

no income taxable under chapter 235, HRS,

may claim a tax credit of $50 per qualified ex-

emption, including the additional exemption

for taxpayers age 65 or over, provided the fol-

lowing four conditions are met:

• The taxpayer is not eligible to be claimed

as a dependent for federal or State income

tax purposes by another taxpayer;

• The taxpayer has adjusted gross income of

less than $30,000; and

• The taxpayer has paid more than $1,000 in

rent during the taxable year.

• The rented property is NOT exempt from

real property tax. Rent paid for property

which is partially or fully exempt from real

property tax will not qualify for the credit.

For example, county or State low-income

housing projects, military housing, dormi-

tories in schools, residential real property

owned by a nonprofit organization, and

homes in which the owner occupies a por-

tion of the property, may have been grant-

ed real property tax exemptions by the

county. If such exemptions, whether par-

tial or full exemptions, have been grant-

ed, the rent paid for such properties will

not qualify for the credit. To verify if real

property tax exemptions have been grant-

ed on the rented property, please inquire

with either the landlord, rental agent, or

the Real Property Tax Office in the county

in which the property is located.

Note: Minor children receiving more than

half of their support from the State Depart-

ment of Human Services, Social Security

benefits, and the like, which you can claim

as dependents, are considered qualified

exemptions for purposes of claiming this

credit.

A “residence” is defined as the dwelling

place that constitutes the principal residence

of the taxpayer or his or her immediate family

in this State.

“Rent” means the amount paid in cash

in any taxable year for the occupancy of a

residence. Rent does not include:

• Charges for utilities, parking stalls, stor-

age of goods, yard services, furniture, fur-

nishings, and the like;

• Rental claimed as a deduction from gross

income or adjusted gross income for in-

come tax purposes;

• Ground rental paid for use of land only; and

• Rental allowances or rental subsidies re-

ceived (i.e., housing allowance received

from the armed forces or the Hawaii Hous-

ing Authority.).

Line 1

Adjusted Gross Income

If the adjusted gross income (Form N-11,

line 20) shown on your return is $30,000 or

more, stop here; you cannot take this credit.

Married filing separately. If you are mar-

ried filing separately, you must add your

spouse’s adjusted gross income to your own.

If you are married filing separately and your

spouse is a nonresident, you need to determine

your spouse’s adjusted gross income from all

sources, within and outside of Hawaii, and

add that amount to your own adjusted gross

income. If the total is $30,000 or more, you

cannot claim this credit.

Line 2

Resident for More Than Nine

Months

If you are a resident who has not been physi-

ally present in Hawaii for more than nine

months in 2019, stop here; you cannot take

this credit.

Line 3

Dependent of Another

axpayer

If you can be claimed as a dependent on

another person’s return, whether or not that

person claims you, stop here; you cannot take

this credit.

Line 4

Your Addresses

List your most recent address. Fill in all of

he required information. If you lived in more

than one location during 2019, attach a sepa-

rate sheet listing the same information for the

other locations.

Do not list any location that was partly or

wholly exempt from real property tax, such

as:

• County or State low-income housing proj-

ects;

• Military housing;

• Dormitories in schools;

• Residential real property owned by a non-

profit organization; or

• Homes in which the owner occupies a por-

tion of the property.

Line 5

Rent

You Paid

Enter the total amount of rent you paid dur-

ing 2019 to all of the locations listed on line

4. If you are sharing or were sharing the rent

with somebody else, list only your share of the

rent here.

Line 6

Exc

lusions

Enter that portion of the amount on line 5

which:

• Is for ground rent, utilities, goods, or ser-

vices;

• You claimed as a deduction anywhere on

your tax return; or

• You were reimbursed, through a rental al-

lowance or rental subsidy from any source.

Line 7

Line 5 minus line 6. If this amount is $1,000

or less, stop here; you cannot take this credit.

Line 8

Qualiﬁ ed Exemptions

On line 8, enter the names of the qualified

exemptions. Start with yourself. Enter your

spouse’s name if you are married and filing a

joint return or married and filing separately

where your spouse is not filing a Hawaii re-

turn, had no income, and was not the depen-

dent of someone else. Then list your depen-

dents and enter the dependent’s relationship

to you. Include minor children receiving more

Page 35

than half of their support from public agen-

cies which you can claim as dependents.

If married filing separately, only one spouse

may claim the dependents.

Enter the number of qualified persons on

line 8.

Line 12

Amount of the Credit

Line 11 times $50. Enter this amount on

Form N-11, line 29.

Deadline for claiming this credit. If you

are a calendar year taxpayer, the deadline to

claim the credit, including amended claims,

is December 31, 2020. If you are a fiscal year

taxpayer, the deadline to claim the credit, in-

cluding amended claims, is 12 months after

the close of your taxable year. You cannot

claim or amend the credit after the deadline.

Part II

Credit for Child and

Dependent Care

Expenses

If you maintain a household that included a

child under age 13 or a dependent or spouse

incapable of self-care, you may be allowed

this credit for expenses you paid during the

taxable year to care for your dependent so you

could work.

Who May Claim the Credit

If you are a resident taxpayer who files an

individual income tax return for a taxable

year, you are not claimed or eligible to be

claimed as a dependent on another taxpayer’s

federal or Hawaii income tax return, and you

maintain a household which includes one or

more qualifying persons (as defined on this

page), you may be allowed a credit against

your income tax. The credit ranges from 15%

to 25% of employment-related expenses (up to

certain limitations) PAID during the taxable

year in order to enable you to work either full

or part time for an employer or as a self-em-

ployed individual.

Maintaining a Household

You will be treated as maintaining a house-

hold for any period only if you furnish over

half the cost of maintaining the household for

that period. If you are married during that

time, you and your spouse must provide over

half the maintenance cost for the period.

The expenses of maintaining a household in-

clude property taxes, mortgage interest, rent,

utility charges, upkeep and repairs, property

insurance, and food consumed on the prem-

ises. They do not include the cost of clothing,

education, medical treatment, vacations, life

insurance, and transportation.

Qualifying Person

A qualifying person is any one of the follow-

ing persons:

a. Any person under age 13 whom you claim

as a dependent (but see Special Rule (3) on

this page, Children of Divorced or Sepa-

rated Parents).

b. Your disabled spouse who is mentally or

physically unable to care for himself or

herself.

c. Any disabled person who is mentally or

physically unable to care for himself or

herself and whom you claim as a depen-

dent, or could claim as a dependent (as a

qualifying relative) except that he or she

had income of $4,200 or more.

Employment-related Expenses

Employment-related expenses are those

paid for the following, but only if paid to en-

able you to be gainfully employed:

(1) Expenses for Household Services. Ex-

penses will be considered for household ser-

vices in your home if they are for the ordinary

and usual services necessary for the operation

of the home, and bear some relationship to the

qualifying person. For example, payment for

services of a domestic maid or cook ordinar-

ily will be considered expenses for household

services if performed at least partially for the

benefit of the qualifying person.

(2) Expenses for the Care of a Qualifying

Person. Expenses will be considered for the

care of one or more qualifying persons if their

main purpose was to assure that individual’s

well-being and protection. You can include

amounts paid for items other than the care of

your child (such as food and schooling) only if

the items are incidental to the care of the child

and cannot be separated from the total cost.

You may NOT include any amount paid for

services outside your household at a camp

where the qualifying person stays overnight.

Do not include services outside your house-

hold as employment-related expenses for

your spouse or a dependent age 13 or older.

However, services outside your household

are employment-related expenses for a de-

pendent who has not reached his or her 13th

birthday or for an individual who regularly

spends at least eight hours each day in your

household.

You may include expenses incurred for

qualified dependent care centers as employ-

ment-related expenses. The dependent care

center must comply with all applicable laws,

rules, and regulations of Hawaii if the center

is located within Hawaii. If the center is lo-

cated outside Hawaii, the center must com-

ply with all applicable laws, rules, and regu-

lations of the state or country in which the

center is located. Furthermore, these centers

must provide care for more than six individu-

als (other than individuals who reside at the

center), and must receive a fee, payment, or

grant providing services for any of the indi-

viduals (regardless of whether such center is

operated for profit).

Note: Payments made to the State of Hawaii

A+ Program qualify for the credit.

Medical Expenses

Some dependent care expenses may qualify

as medical expenses. If you cannot use all the

medical expenses to qualify for this credit

because of the dollar limit or earned income

limit (explained later), you can take the rest

of these expenses as an itemized deduction

for medical expenses. But if you deduct the

medical expenses first on Worksheet A-1,

you cannot use any part of these expenses on

Schedule X.

Special Rules

(1) Married Persons Filing Separately. Gen-

erally, married persons must file a joint return

to claim the credit. If your filing status is mar-

ried filing separately and all of the following

apply, you are considered unmarried for pur-

poses of claiming the credit for child and de-

pendent care expenses.

• You lived apart from your spouse during

the last 6 months of 2019.

• Your home was the qualifying person’s

main home for more than half of 2019.

• You paid more than half of the cost of keep-

ing up that home for 2019.

(2) Marital Status. If you are legally separat-

ed from your spouse under a decree of divorce

or separate maintenance, you are not consid-

ered married.

(3) Children of Divorced or Separated Par-

ents. If you were divorced, legally separated,

or lived apart from your spouse during the last

six months of 2019, you may be able to claim

the credit even if your child is not your de-

pendent. Even if you cannot claim your child

as a dependent, he or she is treated as your

qualifying person if:

• The child was under age 13 or was not

physically or mentally able to care for him-

self or herself, and

• You were the child’s custodial parent. The

custodial parent is the parent with whom

the child lived for the greater number of

nights in 2019. If the child was with each

parent for an equal number of nights, the

custodial parent is the parent with the

higher adjusted gross income. For details

and an exception for a parent who works at

night, see federal Publication 501.

The noncustodial parent cannot treat the

child as a qualifying person even if that parent

is entitled to claim the child as a dependent

under the special rules for a child of divorced

or separated parents.

(4) Payments to a Related Individual. You

can count work-related expenses you pay to

relatives who are not your dependents, even if

they live in your home. However, do not count

any amounts you pay to:

1. A dependent for whom you (or your spouse

if you are married) can claim an exemp-

tion, or

2. Your child who is under age 19 at the end

of the year, even if he or she is not your de-

pendent.

Married Persons Filing

Separatel

y Checkbox

If your filing status is married filing sepa-

ately and you meet the requirements to

claim the credit for child and dependent care

expenses, complete the statement under Part

Page 36

II on Schedule X by checking the checkbox,

confirming you meet those requirements

listed, earlier, under Married Persons Filing

Separately.

Line 1

Care Providers

Complete columns (a) through (e) for each

person or organization that provided the care.

If you do not give the information asked for in

each column, or if the information you give is

not correct, your credit and, if applicable, the

exclusion of employer-provided dependent

care benefits may be disallowed.

You can use Form HW-16, Dependent Care

Provider’s Identification and Certification,

to get the correct information from the care

provider. (This form is available at our web-

site, by calling our Taxpayer Services Branch,

and at any district tax office.) If the provider

does not comply with your request to certify

the information, complete the entries you

can, such as the provider’s name and address.

Write “See attached” in the columns for which

you do not have the provider’s certification of

information. Attach a statement that you re-

quested the information from the care provid-

er, but the provider did not comply with your

request. You must keep records to show that

you exercised due diligence in attempting to

provide the required information. For more

details, including what is considered “due

diligence,” see federal Publication 503.

Columns (a) and (b). Enter the care provid-

er’s name and address. If you were covered

by your employer’s dependent care plan and

your employer furnished the care (either at

your workplace or by hiring a care provider),

enter your employer’s name in column (a),

write “See W-2” in column (b), and leave col-

umns (c) through (e) blank. But if your em-

ployer paid a third party (not hired by your

employer) on your behalf to provide the care,

you must give information on the third party

in columns (a) through (e).

Column (c). If the care provider is an indi-

vidual, enter his or her social security number

(SSN). If the individual is an alien and was is-

sued an individual taxpayer identification

number (ITIN) by the IRS, enter the ITIN.

If the individual has applied for an ITIN but

the IRS has not yet issued the ITIN, write

“Applied For.” For other than an individual,

enter provider’s federal employer identifica-

tion number (FEIN). If the provider is a tax-

exempt organization, write “Tax-Exempt” in

column (c).

Column (d). Enter the care provider’s Ha-

waii Tax I.D. Number. If the provider is a tax-

exempt charitable organization (IRC section

501(c)(3)), enter “Tax-Exempt.”

Column (e). Enter the total amount you ac-

tually paid during the taxable year to the care

provider. Also include amounts your employ-

er paid on your behalf to a third party. It does

not matter when the expenses were incurred.

Do not reduce this amount by any reimburse-

ment you received.

Line 2

Dependent Care Beneﬁ ts

If you received dependent care benefits

from an employer (you have a federal form

W-2 that has an amount in Box 10), enter the

amount shown in Box 10 of your W-2 form(s).

If you were self-employed or a partner, in-

clude amounts you received under a depen-

dent care assistance program from your sole

proprietorship or partnership.

Line 4

Amount Forf

eited or Carried

Over to 2020

If you participated in an employee plan in

which the amount you contributed to an em-

ployer-paid dependent care benefit plan was

deducted from your income, and you did not

receive the full benefit from this plan, you

may be entitled to deduct the amount forfeited

on this line. See your employer for the forfeit-

ed amount you are allowed to deduct.

Also include on this line any amount you did

not receive but are permitted by your employ-

er to carry forward and use in the following

year during a grace period.

Line 8

Your Earned Income

In general, earned income is wages, salaries,

tips, and other employee compensation. It also

includes net earnings from self-employment.

For more information, see the instructions to

lines 23 and 24.

Line 9

Spouse’

s Earned Income

If your filing status is Married Filing Joint-

ly, enter your spouse’s earned income on this

line.

If your filing status is Married Filing Sepa-

rately, see Married Persons Filing Separately

discussed earlier. If you are considered un-

married under that rule, enter your earned in-

come (from line 8) on this line. If you are not

considered unmarried under that rule, enter

your spouse’s earned income on line 9.

If your spouse was a student or disabled in

2019, see If You or Your Spouse Was a Student

or Disabled.

All other taxpayers should enter the amount

on line 8.

Line 16

axable Beneﬁ ts

The taxable portion of employer-paid de-

endent care benefits for federal income tax

purposes is included in your federal AGI. If

the taxable portion of employer-paid depen-

dent care benefits is the same for federal and

Hawaii income tax purposes, no additional ad-

justment needs to be made. If the taxable por-

tion of employer-paid dependent care benefits

is different for federal and Hawaii income tax

purposes, an adjustment needs to be made to

arrive at Hawaii AGI.

Line 21

Qualifying P

erson(s)

Complete columns (a) through (d) for each

qualifying person. If you have more than two

qualifying persons, attach a statement to your

return with the required information. Be sure

to put your name and social security number

on the statement. Also, write “See attached”

on the dotted line next to line 22.

Column (a). Enter each qualifying person’s

name.

Column (b). Enter the qualifying person’s

relationship to you.

Column (c). Enter the qualifying person’s

social security number.

Column (d). Enter the qualified expenses

you incurred and paid in 2019 for the person

listed in column (a). Do not include in column

(d) qualified expenses:

• You incurred in 2019 but did not pay until

2020. You may be able to use these expens-

es to increase your 2020 credit.

• You incurred in 2018 but did not pay until

2019. Instead, see the instructions for line

28 on page 37.

• You prepaid in 2019 for care to be provided

in 2020. These expenses may only be used

to figure your 2020 credit.

Lines 23 and 24

Earned Income Limit

The amount of your qualified expenses can-

ot be more than your earned income or, if

married filing a joint return, the smaller of

your earned income or your spouse’s earned

income.

In general, earned income is wages, salaries,

tips, and other employee compensation. It also

includes net earnings from self-employment.

Unmarried taxpayers. If you are unmar-

ried at the end of 2019 or are treated as being

unmarried at the end of the year, enter your

earned income on line 23.

Married Taxpayers. If you are married fil-

ing a joint return, figure each spouse’s earned

income separately and disregard community

property laws. Enter your earned income on

line 23 and your spouse’s earned income on

line 24.

If You or Your Spouse Was a Student or

Disabled. Your spouse’s earned income. Your

spouse was a full-time student if he or she was

enrolled as a full-time student at a school for

some part of each of five calendar months

during 2019. The months need not be consecu-

tive. A school does not include an on-the-job

training course, correspondence school, or a

school offering courses only through the In-

ternet. Your spouse was disabled if he or she

was not physically or mentally capable of self-

care. Figure your spouse’s earned income on

a monthly basis.

Page 37

Worksheets

Form N-11 – State Tax Refund Worksheet

1. Enter your State tax overpayment (line 42) from your 2018 Form N-11

return. Do not enter more than the amount of your state and local income

taxes shown on your 2018 Itemized Deduction Worksheet A-2, line 5 ...........

2. Enter from your 2018 Form N-11 the following:

a. Refundable food/excise tax credit (line 28) ..................................

b. Credit for low-income household renter (line 29) ........................

c. Credit for child and dependent care expenses (line 30) .............

d. Credit for child passenger restraint system(s) (line 31) ..............

e. Carryover of the residential construction and remode

ling tax credit (Sch. CR, line 11) ....

3. Add lines 2a through 2e .................................................................

4. Line 1 minus line 3. If zero or less, enter “0” here and on

line 8, skip lines 5-7; otherwise continue on to line 5 ..................

5. Enter amount from your 2018 Form N-11, line 22 ......................

6. Enter the amount shown below for the ﬁ ling status you

claimed on your 2018 Form N-11 ................................................

Single or married ﬁ ling separately— $2,200

Married ﬁ ling jointly or qualifying widow(er)— 4,400

Head of household— 3,212

7. Line 5 minus line 6. Enter the result, but not less than zero ......

8. Compare the amounts on lines 4 and 7 above and enter

the SMALLER of the two amounts here .....................................

9. Enter the taxable part of your refund reported on your 2019

federal Schedule 1 (Form 1040 or 1040-SR), line 1. If this

amount is blank, enter zero here ..................................................

10. If line 8 is LARGER than line 9, subtract line 9 from line 8.

Enter the result here and on line b of the Hawaii

Additions Worksheet OR

If line 8 is SMALLER than line 9, subtract line 8 from

line 9. Enter the result here and on line b of the

Hawaii Subtractions Worksheet O

If line 8 EQUALS line 9, enter zero and stop here .....................

Hawaii Additions Worksheet

a Taxable amount relating to Individual Housing Account ............

b Hawaii tax refund adjustment ........................................................

c Peace Corps compensation..........................................................

d Depreciation adjustment ................................................................

e Gain adjustment .............................................................................

f Excluded income earned outside the U.S. ..................................

g Student loan interest deduction ....................................................

h Employer-provided adoption beneﬁ ts ..........................................

i Qualiﬁ ed tuition program distributions for elementary

and secondary school expenses .................................................

j Other adjustments (attach separate explanation to Form N-11) .................

k Add lines a to j. Enter here and on Form N-11, line 10 ............

Hawaii Subtractions Worksheet

a Interest on federal obligations. But subtract the amount

from line 14 of federal Form 8815 ................................................

b Hawaii tax refund adjustment ........................................................

c Interest earned by an Individual Housing Account .....................

d Qualifying compensation to Hansen’s disease patient ..............

e Expenses connected with federal credits ....................................

f Child’s interest and dividend income on federal

Form 8814 that is not reported on Form N-814 .........................

g Premiums on and beneﬁ ts from prepaid legal services plans ...............

h Student loan interest deduction ....................................................

i Employer-provided adoption beneﬁ ts ..........................................

j Certain income from a qualiﬁ ed high technology business .......

k Individual development accounts .................................................

l Moving expenses ...........................................................................

m Qualiﬁ ed bicycle commuting reimbursement ..............................

n Other adjustments (attach separate explanation to Form N-11) ..............

o Add lines a to n. Enter here and on Form N-11, line 18 ............

For each month or part of a month your

spouse was a student or was disabled, he or

she is considered to have worked and earned

income. His or her earned income for each

month is considered to be at least $200 ($400

if more than one qualifying person was cared

for in 2019). If your spouse also worked dur-

ing that month, use the higher of $200 (or

$400) or his or her actual earned income for

that month.

For any month that your spouse was not a

student or disabled, use your spouse’s actual

earned income if he or she worked during the

month.

Your earned income. These rules for a

spouse who was a student or disabled also ap-

ply to you if you were a student or disabled.

For each month or part of a month you were

a student or disabled, your earned income is

considered to be at least $200 ($400 if more

than one qualifying person was cared for in

2019). If you also worked during that month,

enter the higher of $200 (or $400) or your ac-

tual earned income for that month.

Both spouses were students or disabled. If,

in the same month, both you and your spouse

were either students or disabled, only one of

you can be treated as having earned income

in that month under these rules.

Self-employment Income. You must reduce

your earned income by any loss from self-

employment. If you only have a loss from self-

employment, or your loss is more than your

other earned income, you cannot take the

credit.

Line 28

Amount of the Credit

If you had qualified expenses for 2018 that

you did not pay until 2019, you may be able to

increase the amount of credit you can take in

2019. To do this, multiply the 2018 expenses

you paid in 2019 by the applicable percent-

age from the table on line 27 that applies to

your 2018 adjusted gross income. Your 2018

expenses must be within the 2018 limits. At-

tach a computation showing how you figured

the increase. If you can take a credit for your

2018 expenses, write “PYE” and the amount

of the credit on the dotted line next to line 28.

Enter the total amount of the credit on line 28.

Also enter this amount on Form N-11, line 30.

Page 38

Worksheets (continued)

Itemized Deductions Worksheet

WORKSHEET A-1– Medical and Dental Expenses

1. Enter amount of medical and dental expenses (see

page 17 of Instructions). ................................................................

2. Enter the amount from Form N-11, line 20 (Hawaii AGI). .........

3. Multiply line 2 by 10% (.10). If zero or less, enter zero. ...............

4. Line 1 minus line 3. If zero or less, enter zero. Enter

the result here and on Form N-11, line 21a. ...............................

WORKSHEET A-2 – Taxes You Paid

Note: You can claim a deduction for state and local, and foreign,

income, war proﬁ ts, and excess proﬁ ts taxes (or state and local general

sales taxes if an election is made to deduct state and local general sales

taxes instead of state and local income taxes) if your federal AGI is less

than $100,000 and you are single or married ﬁ ling separately; or less

than $150,000 and you are a head of household; or less than $200,000

and you are married ﬁ ling jointly or a qualifying widow(er).

5. State and local (check only one box):

Income taxes, or

General sales taxes ............................................................

6. Real estate taxes. ...........................................................................

7. Personal property taxes. ................................................................

8. Other taxes. .....................................................................................

9. Add lines 5 through 8. Enter the total here and on

Form N-11, line 21b. ......................................................................

WORKSHEET A-3 – Interest You Paid

10. Home mortgage interest and points reported to you on

federal Form 1098. .........................................................................

11. Home mortgage interest not reported to you on federal

Form 1098. ......................................................................................

12. Points not reported to you on federal Form 1098 (see

instructions for federal Schedule A (Form 1040 or 1040-SR). ..

13. Investment interest (attach Form N-158). ....................................

14. Add lines 10 through 13. Enter the total here and on

Form N-11, line 21c. ......................................................................

WORKSHEET A-4—Gifts to Charity

15. Enter amount of gifts by cash or check (if any gift of

$250 or more, see page 19 of Instructions). ...............................

16. Other than by cash or check (if any gift of $250 or more,

see page 19 of Instructions) (attach federal Form 8283

if over $500). ...................................................................................

17. Carryover from prior year. ..............................................................

18. Add lines 15 through 17. Enter total here and on

Form N-11, line 21d. ......................................................................

WORKSHEET A-5—Casualties and Thefts

19. Total casualty and theft loss(es) from the 2017 federal

Form 4684, line 16 (see instructions on page 20). .....................

20. Enter the amount from Form N-11, line 20 (Hawaii AGI). .........

21. Multiply line 20 by 10% (.10). If zero or less, enter zero. ............

22. Line 19 minus line 21. If zero or less, enter zero.

Enter the result here and on Form N-11, line 21e. .....................

WORKSHEET A-6—Miscellaneous Deductions

23. Unreimbursed employee business expenses—job travel,

union dues, job education (attach the 2017 federal

Form 2106 or Form 2106-EZ if required). ...................................

24. Tax preparation fees. ......................................................................

25. Other expenses (investment, safe deposit box, etc.) (list

type and amount, and attach the list to your return). ..................

26. Add lines 23 to 25. ..........................................................................

27. Enter the amount from Form N-11, line 20 (Hawaii AGI). .........

28. Multiply line 27 by 2% (.02). If zero or less, enter zero. ..............

29. Line 26 minus line 28. If zero or less, enter zero. .......................

30. Other deductions not subject to 2% AGI limit (see in-

structions on page 21) (list type and amount, and attach

the list to your return). .....................................................................

31. Add lines 29 and 30. Enter total here and on

Form N-11, line 21f. ........................................................................

32. Total itemized deductions. Add lines 4, 9, 14, 18, 22,

and 31. .............................................................................................

Note: If your Hawaii adjusted gross income is above a certain amount,

you may not be able to deduct all of your itemized deductions. See page

22 of the Instructions.

Itemized Deductions Worksheet (continued)

Total Itemized Deductions Worksheet

1. Enter the amount from line 32 of the Itemized Deductions

Worksheet. ......................................................................................

2. Enter from the Itemized Deductions Worksheet the following:

a. Medical and dental expenses (Worksheet A-1, line 4). ..........

b. Investment interest (Worksheet A-3, line 13). .........................

c. Casualty and theft losses (Worksheet A-5, line 22). ...............

d. Any gambling and casualty or theft losses included in

Worksheet A-6, line 30. .............................................................

3. Add lines 2a through 2d. ................................................................

4. Is the amount on line 3 less than the amount on line 1?

No. Your deduction is not limited. Enter the amount from

line 1 of this worksheet on Form N-11, line 22. Do not

complete the rest of this worksheet.

Yes. Line 1 minus line 3. ................................................................

5. Multiply line 4 by 80% (.80). ...........................................................

6. Enter the amount from Form N-11, line 20 (Hawaii AGI). .........

7. Enter $166,800 ($83,400 if married ﬁ ling separately).................

8. Is the amount on line 7 less than the amount on line 6?

No. Your deduction is not limited. Enter the amount from

line 1 of this worksheet on Form N-11, line 22. Do not

complete the rest of this worksheet.

Yes. Line 6 minus line 7. ................................................................

9. Multiply line 8 by 3% (.03). .............................................................

10. Enter the smaller of line 5 or line 9. .............................................

11. Total itemized deductions. Line 1 minus line 10. Enter the

result here and on Form N-11, line 22. ........................................

Page 39

Worksheets (continued)

Tax Computation Worksheet

Enter the tax amount calculated from a or b.

a Tax Table, Tax Rate Schedule, or Tax on Capital Gains Worksheet ................

b Form N-168 or Form N-615 ..........................................................

c Enter any additional tax from Form N-2, Distribution from

an Individual Housing Account. ....................................................

d Enter any additional tax from Form N-103, Sale of Your Home

e Enter any additional tax from Form N-152, Tax on Lump-Sum Distributions ....

f Enter any additional tax from Form N-312, Recapture

of Capital Goods Excise Tax Credit .............................................

g Enter any additional tax from Form N-338, Tax Credit for Flood Victims.............

h Enter any additional tax from Form N-344, Recapture of Important

Agricultural Land Qualiﬁ ed Agricultural Cost Tax Credit .......................................

i Enter any additional tax from Form N-348, Recapture of

Capital Infrastructure Tax Credit ...................................................

j Enter any additional tax from Form N-405, Tax on

Accumulation Distribution of Trusts ..............................................

k Enter any additional tax from Form N-586, Recapture of

Tax Credit for Low-Income Housing.............................................

l Enter any additional tax from Form N-814, Parent’s

Election to Report Child’s Interest and Dividends ......................

m Add lines a or b, and c through l. This is your total tax.

Enter the result here and on Form N-11, line 27 ........................

Note: If you entered any amount in lines b through l, ﬁ ll in the oval

before “. . . if tax . . . is included.” on Form N-11, line 27.

Tax on Capital Gains Worksheet

Note: If your taxable income is $48,000 ($24,000 for Single, and Married

Filing Separately; or $36,000 for Head of Household classiﬁ cations) or

under, do not use this worksheet.

1. Enter your taxable income from Form N-11, line 26...................

2. Enter your net long-term capital gain (federal Sch. D (Form 1040 or 1040-SR),

line 15; or federal Form 1040 or 1040-SR, line 6 if Sch. D is not required) ........

3. Combine your Hawaii long-term adjustments, if any,

and enter the total here (see page 23 of the Instructions) ....................

4. Combine lines 2 and 3. This is your Hawaii net long-term

capital gain ......................................................................................

5. Enter your net capital gain (federal Sch. D (Form 1040 or 1040-SR), line 16; or

federal Form 1040 or 1040-SR, line 6 if Sch. D is not required) ..........................

6. Combine your Hawaii short-term adjustments, if any,

and enter the total here (see page 23 of the Instructions) ....................

7. Combine lines 3, 5, and 6. This is your Hawaii net

capital gain ......................................................................................

8. Enter the smaller of line 4 or line 7 ..............................................

9. If you are ﬁ ling Form N-158, enter the amount from

line 4e of Form N-158 ...................................................................

10. Line 8 minus line 9 (If this amount is zero or less, stop

here; you cannot use this worksheet to ﬁ gure your tax.) ........

11. Line 1 minus line 10 .......................................................................

12. Enter the amount shown below for the ﬁ ling status you claimed ...................

Single or Married ﬁ ling separately— $24,000

Married ﬁ ling jointly or qualifying widow(er)— 48,000

Head of household— 36,000

13. Enter the greater of line 11 or line 12 ..........................................

14. Line 1 minus line 13. This is the amount of net capital

gains eligible for alternative tax. ....................................................

15. Compute the tax on the amount on line 13 using the

Tax Table or Tax Rate Schedules, whichever applies ................

16. Multiply line 14 by 7.25% (.0725) and enter the result ...............

17. Line 15 plus line 16. .......................................................................

18. Compute the tax on the amount on line 1 using the

Tax Table or Tax Rate Schedules, whichever applies ................

19. Enter the smaller of line 17 or line 18 here and on line a

of the Tax Computation Worksheet above. If line 17 is

maller, enter the amount from line 14 in the space provided

beside Form N-11, line 27a .........................................................

Other State and Foreign

Tax Credit Worksheet

Note: If you claim a credit for income taxes paid to other states and

countries, you cannot also claim those amounts as an itemized

deduction for state and foreign income taxes paid to another state or

foreign country.

1. Enter taxable income from Form N-11, line 26 ...........................

2. Enter amount of long-term capital gain from the space

provided beside Form N-11, line 27a ..........................................

3. Enter the amount of your out-of-state income,

including capital gains. Do not include any income that

is exempt in Hawaii such as employer-funded pensions ...........

4. Enter the amount of long-term capital gains from sources

outside the State ............................................................................

5. Enter the amount of tax you paid to other States, except

for tax paid on income that is exempt in Hawaii (attach a

copy of the tax return(s) from the other state(s)) ........................

6. Enter the amount of tax you paid to foreign countries or

to U.S. possessions, except for tax paid on income that

is exempt in Hawaii (attach a copy of federal Form(s) 1116,

or federal Form(s) 1099-DIV or 1099-INT if federal Form(s)

1116 is not required) ......................................................................

7. Enter the amount of the federal foreign tax credit you

were allowed to take this year. Do not include amounts

carried over to other years, or amounts from prior years

that were carried forward to this year ...........................................

8. Line 6 minus line 7 ..........................................................................

9. Line 5 plus line 8. This is the total amount of out-of-state

tax eligible for the credit .................................................................

10. Line 1 minus line 3. This is your Hawaii source income ............

11. Line 2 minus line 4. This is your Hawaii source long-term

capital gain. If line 4 exceeds line 2, enter zero here .................

12. Line 10 minus line 11. This is your Hawaii

ordinary income .............................................................................

13. Enter your tax amount from line a or line b of the Tax

omputa tion Worksheet on this page ......................................

...

14. Figure the Hawaii tax on the amount on line 12. Use the

Tax Table or Tax Rate Schedules .................................................

15. Multiply the amount on line 11 by 7.25% (0.0725) .....................

16. Add lines 14 and 15 .......................................................................

17. Line 13 minus line 16 .....................................................................

18. Enter the smaller of line 9 or line 17. ...........................................

19. Enter the amount from Form N-11, line 34 .................................

20. Enter the smaller of line 18 or line 19 here and on Schedule

CR, line 1. Any excess cannot be carried forward ....................

Page 40

Adoption Beneﬁ ts Worksheet

Caution: See the federal instructions to Form 8839, Qualiﬁ ed Adoption Expenses, before completing this worksheet.

Child 1 Child 2

1. Maximum exclusion per child................................................................................................... $10,000 $10,000

2. Did you receive employer-provided adoption beneﬁ ts for a prior year for the same child?

No. Enter -0-.

Yes. See the federal instructions for the amount to enter. .......................................................

3. Subtract line 2 from line 1. .......................................................................................................

4. Employer-provided adoption beneﬁ ts you received in 2019.

This amount should be shown in box 12 of your 2019 Form(s) W-2 with code T ....................

5. Add the amounts on line 4 ................................................................................................................................................................

6. Enter the smaller of line 3 or line 4. But if the child was a child with special needs and

the adoption became ﬁ nal in 2019, enter the amount from line 3 ...........................................

7. Enter your Hawaii modiﬁ ed adjusted gross income* .......................................................................................................................

8. Is line 7 more than $150,000?

No. Skip lines 8 - 9 and enter -0- on line 10.

Yes. Subtract $150,000 from line 7 ..................................................................................................................................................

9. Divide line 8 by $40,000. Enter the result as a decimal (rounded to at least three places). Do not

enter more than 1.000 ......................................................................................................................................................................

10. Multiply each amount on line 6 by line 9 ..................................................................................

11. Excluded beneﬁ ts. Subtract line 10 from line 6 .....................................................................

12. Add the amounts on line 11 ..............................................................................................................................................................

13. Taxable beneﬁ ts. Is line 12 more than line 5?

No. Subtract line 12 from line 5.

Yes. Subtract line 5 from line 12. Enter the result as a negative number. ........................................................................................

14. Enter the taxable adoption beneﬁ ts as reported on your 2019 federal return ..................................................................................

15. If line 13 is LARGER than line 14, subtract line 14 from line 13. Enter the result here and on line

h of the Hawaii Additions Worksheet on page 37 OR

If line 13 is SMALLER than line 14, subtr

act line 13 from line 14. Enter the result here and on line

i of the Hawaii Subtractions Worksheet on page 37 .........................................................................................................................

*Hawaii modiﬁ ed adjusted gross income is your Hawaii adjusted gross income before subtracting any deduction for student loan interest, plus the

amount of employer-provided adoption beneﬁ ts from the Adoption Beneﬁ ts Worksheet, line 5.

Student Loan Interest Deduction Worksheet

1. Enter the total interest you paid in 2019 on qualiﬁ ed student loans. Do not enter

more than $2,500. ...................................................................................................................

2. Enter your Hawaii modiﬁ ed adjusted gross income** . ............................................................

Note: If line 2 is $65,000 or more if single, head of household, or qualifying widow(er) OR

$130,000 or more if married ﬁ ling jointly, you cannot take the deduction. Skip lines 3-6 and

enter -0- on line 7.

3. Enter: $50,000 if single, head of household, or qualifying widow(er);

$100,000 if married ﬁ ling jointly. ..............................................................................................

4. Is the amount on line 2 more than the amount on line 3?

No. Skip lines 4 and 5, enter -0- on line 6, and go to line 7.

Yes. Subtract line 3 from line 2. ...............................................................................................

5. Divide line 4 by $15,000 ($30,000 if married ﬁ ling jointly). Enter the result as a decimal

(rounded to at least three places). If the result is 1.000 or more, enter 1.000. ........................

6. Multiply line 1 by line 5. ............................................................................................................

7. Student loan interest deduction. Subtract line 6 from line 1. Enter the result here. .............

8. Enter the student loan interest deduction as reported on your 2019 federal return. ................

9. If line 7 is LARGER than line 8, subtract line 8 from line 7. Enter the result here and on

line h of the Hawaii Subtractions Worksheet on page 37 OR

If line 7 is SMALLER than line 8, subtr

act line 7 from line 8. Enter the result here and

on line g of the Hawaii Additions Worksheet on page 37. .......................................................

**Ha

waii modiﬁ ed adjusted gross income is your Hawaii adjusted gross income before subtracting any deduction

for student loan interest.

Worksheets (continued)

Page 41

2019

TAX TABLES

Tax Table Must Be Used By Persons With Taxable

Income Of Less Than $100,000

For a copy of the Tax Table, go to tax.hawaii.gov/forms/

Page 42

2019 Tax Rate Schedules

CAUTION

If your taxable income is less than $100,000, you MUST use the Tax Table.

Schedule I

SINGLE TAXPAYERS AND MARRIED FILING SEPARATE RETURNS

If the amount on

Form N-11, Line 26 is: Your tax is:

Not over $2,400 .............................................. 1.40% of taxable income

Over $2,400 but not over $4,800 .................... $ 34 plus 3.20% over $2,400

Over $4,800 but not over $9,600 .................... $ 110 plus 5.50% over $4,800

Over $9,600 but not over $14,400 .................. $ 374 plus 6.40% over $9,600

Over $14,400 but not over $19,200 ................ $ 682 plus 6.80% over $14,400

Over $19,200 but not over $24,000 ................ $ 1,008 plus 7.20% over $19,200

Over $24,000 but not over $36,000 ................ $ 1,354 plus 7.60% over $24,000

Over $36,000 but not over $48,000 ................ $ 2,266 plus 7.90% over $36,000

Over $48,000 but not over $150,000 .............. $ 3,214 plus 8.25% over $48,000

Over $150,000 but not over $175,000 ............ $ 11,629 plus 9.00% over $150,000

Over $175,000 but not over $200,000 ............ $ 13,879 plus 10.00% over $175,000

Over $200,000 ................................................ $ 16,379 plus 11.00% over $200,000

Schedule II

MARRIED TAXPAYERS FILING JOINT RETURNS AND CERTAIN WIDOWS AND WIDOWERS

If the amount on

Form N-11,

Line 26 is: Your tax is:

Not over $4,800 .............................................. 1.40% of taxable income

Over $4,800 but not over $9,600 .................... $ 67 plus 3.20% over $4,800

Over $9,600 but not over $19,200 .................. $ 221 plus 5.50% over $9,600

Over $19,200 but not over $28,800 ................ $ 749 plus 6.40% over $19,200

Over $28,800 but not over $38,400 ................ $ 1,363 plus 6.80% over $28,800

Over $38,400 but not over $48,000 ................ $ 2,016 plus 7.20% over $38,400

Over $48,000 but not over $72,000 ................ $ 2,707 plus 7.60% over $48,000

Over $72,000 but not over $96,000 ................ $ 4,531 plus 7.90% over $72,000

Over $96,000 but not over $300,000 .............. $ 6,427 plus 8.25% over $96,000

Over $300,000 but not over $350,000 ............ $ 23,257 plus 9.00% over $300,000

Over $350,000 but not over $400,000 ............ $ 27,757 plus 10.00% over $350,000

Over $400,000 ................................................ $ 32,757 plus 11.00% over $400,000

Schedule III

UNMARRIED HEADS OF HOUSEHOLD

If the amount on

Form N-11, Line 26 is: Your tax is:

Not over $3,600 .............................................. 1.40% of taxable income

Over $3,600 but not over $7,200 .................... $ 50 plus 3.20% over $3,600

Over $7,200 but not over $14,400 .................. $ 166 plus 5.50% over $7,200

Over $14,400 but not over $21,600 ................ $ 562 plus 6.40% over $14,400

Over $21,600 but not over $28,800 ................ $ 1,022 plus 6.80% over $21,600

Over $28,800 but not over $36,000 ................ $ 1,512 plus 7.20% over $28,800

Over $36,000 but not over $54,000 ................ $ 2,030 plus 7.60% over $36,000

Over $54,000 but not over $72,000 ................ $ 3,398 plus 7.90% over $54,000

Over $72,000 but not over $225,000 .............. $ 4,820 plus 8.25% over $72,000

Over $225,000 but not over $262,500 ............ $ 17,443 plus 9.00% over $225,000

Over $262,500 but not over $300,000 ............ $ 20,818 plus 10.00% over $262,500

Over $300,000 ................................................ $ 24,568 plus 11.00% over $300,000

Use this schedule if you

ﬁ lled in Filing Status Oval

1 or 3 on Form N-11

Use this schedule if you

ﬁ lled in Filing Status Oval

2 or 5 on Form N-11

Use this schedule if you

ﬁ lled in Filing Status Oval

4 on Form N-11

Page 43

STATE OF HAWAII—DEPARTMENT OF TAXATION

HAWAII TAXPAYER BILL OF RIGHTS

MESSAGE FROM THE DIRECTOR

This publication explains some of your most

important rights as a taxpayer.

Hawaii taxpayers have many rights. Some are based

on laws, and others are based on our commitment to

administer Hawaii’s tax laws in a fair and equitable

manner. The Hawaii Taxpayer Bill of Rights compiles

these rights for your easy reference.

Taxpayer rights are at the heart of good tax

administration — a pledge that the tax laws will be

administered with fairness, uniformity, courtesy,

and common sense. In our commitment to this

pledge, we invite your suggestions for improving the

services provided by the Department of Taxation.

HAWAII TAXPAYER BILL OF RIGHTS

I. Protection of Taxpayer Rights

Taxpayers are entitled to be informed about their ri

ghts

and responsibilities and to be assured that their rights

will be protected throughout their contact with the De-

partment of Taxation (Department).

II. Tax Information

Taxpayers have a right to tax information written in plain

language.

Taxpayers have a right to examine their own tax records,

audit ﬁ les, and collection ﬁ les.

Taxpayers have a right to request copies of their own tax

returns and return information, if available, subject to

copying fees.

Taxpayers have a right to obtain explanations regarding

billings and assessments.

III. Professional and Courteous Service

Taxpayers have a right to prompt, courteous, and accu-

rate responses to all questions and requests for tax as-

sistance.

Taxpayers have a right to be assured that no civil service

employee of the Department will be paid, promoted, or

in any way rewarded based on the amount of assess-

ments made or taxes collected.

Taxpayers have a right to be free from harassment and

inappropriate contact by Department personnel in mat-

ters relating to the collection of delinquent taxes and

during the course of audits.

IV. Privacy and Conﬁ dentiality

Taxpayers have a right to be assured that their deal

ings

with the Department will be kept conﬁ dential.

Taxpayers have a right to be assured that their tax re-

turns and tax return information will not be disclosed,

except as provided by law.

V. Time Limitations

Taxpayers are entitled to seek a refund if they have over-

paid their taxes. A claim for refund must be ﬁ led within

the applicable statute of limitations.

The Department may assess a taxpayer additional taxes

if the assessment is made within the applicable statute

of limitations. There is no time limit on the assessment of

taxes in the case of a false or fraudulent return or failure

to ﬁ le a return.

Taxpayers may extend the period of limitations for the

assessment or refund of taxes by signing a written

agreement with the Department.

If the Department is notiﬁ ed by the Internal Revenue

Service or a taxpayer of any changes, corrections, or

adjustments to the taxpayer’s Federal tax return, the

statute of limitations is automatically extended.

VI. Audits and Assessments

Taxpayers have a right to a Proposed Notice of Asses

ment except in the case of a jeopardy assessment. A

Proposed Notice of Assessment is mailed to the tax-

payer’s last known address and: (1) explains the basis

for the assessment of taxes, penalties, and interest; (2)

informs taxpayers of their right to request clariﬁ cation or

to object to the tax assessment within 30 days from the

date the Proposed Notice of Assessment was mailed;

and (3) informs taxpayers that the proposed tax assess-

ment will become ﬁ nal after the expiration of 30 days

from the mailing of the Proposed Notice of Assessment.

Taxpayers have a right to a Final Notice of Assessment,

issued after the expiration of 30 days from the mailing of

the Proposed Notice of Assessment, that provides the

basis for the tax assessment, and informs the taxpayer

of the procedures for appealing the assessment.

Taxpayers have a right to request a meeting with the

auditor or collector, their supervisor, or senior manage-

ment to discuss a Proposed or Final Notice of Assess-

ment if they do not agree with the tax assessment.

Taxpayers have a right to request that the Department

consider a closing agreement to reduce a Proposed or

Final Notice of Assessment. Closing agreements are ﬁ -

nal.

VII. Tax Appeals/Payment Under Protest

Taxpayers have a right to information regarding proc

dures for appealing a tax assessment or a denial of a

claim for refund.

Tax Appeals. Taxpayers have a right to appeal an as-

sessment or a denial of a claim for refund to the board of

review or to the tax appeal court. Taxpayers also have a

right to appeal an assessment to our Administrative Ap-

peals Ofﬁ ce. In order to appeal to the Administrative Ap-

peals Ofﬁ ce, an appeal application must be ﬁ led within

20 days from the mailing date of the Proposed Notice of

Assessment or within 30 days from the mailing date of

the Final Notice of Assessment. The assessment does

not need to be paid in order to appeal to the Administra-

tive Appeals Ofﬁ ce.

If the appeal is ﬁ led directly with the tax appeal court, a

court-stamped copy of the notice of appeal must also be

served on the Director of Taxation within 30 days from

the date the Final Notice of Assessment was mailed by

delivery to:

Civil Legal Complaints/Legal Process

Director of Taxation

Department of Taxation

830 Punchbowl Street, Room 221

Honolulu, HI 96813-5094

If the appeal is ﬁ led with the board of review, the deci-

sion of the board may be appealed to the tax appeal

court within 30 days after the ﬁ ling of the board of review

decision. A court-stamped copy of the notice of appeal

must also be served on the Director of Taxation at the

above address within 30 days after the ﬁ ling of the board

of review decision.

If the appeal is ﬁ led with the tax appeal court, the deci-

sion of the tax appeal court may be appealed within 30

days to the Intermediate Appellate Court.

The ﬁ rst appeal to either the board of review or to the tax

appeal court may be made without payment of the tax

assessed. However, the assessed tax must be paid to-

gether with interest when the taxpayer appeals the deci-

sion by the board or the tax appeal court or the decision

by the board in favor of the Department is not appealed.

In addition, a taxpayer who prevails before the board of

review does not have to pay the assessed tax prior to an

appeal by the Department to the tax appeal court. Simi-

larly, a taxpayer who prevails before the board of review

and the tax appeal court does not have to pay the as-

sessed tax prior to an appeal by the Department to the

Intermediate Appellate Court.

The tax appeal court may allow an individual taxpayer to

appeal an income tax assessment without prior payment

of the tax where the total tax liability does not exceed

$50,000 and the taxpayer shows that the payment of the

tax would cause irreparable harm.

Payment Under Protest. In lieu of ﬁ ling an appeal or if an

appeal is not ﬁ led with the board of review, with the tax

appeal court, or with the Administrative Appeals Ofﬁ ce

within 30 days from the date the Final Notice of Assess-

ment was mailed, the taxpayer may pay the disputed tax

assessment under written protest and seek to recover

the taxes by ﬁ ling an action in tax appeal court within 30

days from the date of payment.

VIII. Representation

Taxpayers have a right to represent themselves or ha

another person accompany or represent them (with

proper written authorization) when dealing with the De-

partment on any tax matter, including audits, collections,

and appeals.

IX. Taxpayer Advocate

Taxpayers have a right to seek the assistance of our Tax-

payer Advocate to resolve any tax-related problem after

all other means for resolving the problem have been ex-

hausted, or if they feel that their rights as a taxpayer

have been abridged, except in the case of a criminal tax

investigation.

X. Installment Agreements, Waivers, and

Compromises

Installment Agreements. Taxpayers have a right to re

quest that the Department consider an installment pay-

ment agreement to allow taxpayers to pay their delin-

quent taxes over time. The Department will evaluate a

request for an installment payment agreement based on

the ﬁ nancial condition of the taxpayer. Taxpayers will be

notiﬁ ed before collection action is taken on any out-

standing tax liability if the installment payment agree-

ment is in good standing. Interest will continue to accrue

on the outstanding tax and penalty until paid in full. The

Department may offset any outstanding tax liability with

any credits due to the taxpayer from other taxes.

Waiver of Penalties and Interest. Taxpayers have a right

to request that the Department waive penalties and in-

terest added to any tax if the taxpayer can show that

failure to ﬁ le a return or pay a tax on time was due to

reasonable cause, i.e., not due to the taxpayer’s own

carelessness, neglect, or wilful disregard of the law, but

due to circumstances beyond the taxpayer’s control.

Compromise Offers. Taxpayers have a right to request

that the Department consider a compromise offer to re-

duce any tax claim arising under the tax laws adminis-

tered by the Department based on doubt as to liability or

collectibility, subject to the Governor’s approval. If the tax

liability excluding penalties and interest is $50,000 or

less, the Director may approve the offer in compromise

without the Governor’s approval after the offer in com-

promise has been posted on the Department’s website

for ﬁ ve calendar days.

Any offer in compromise submitted to the Department

must be accompanied by 20% of the amount of the offer

in cases of a lump-sum offer in compromise, or the ﬁ rst

proposed payment in the case of a periodic payment of-

fer in compromise. Individual taxpayers who meet the

low-income certiﬁ cation guidelines published by the In-

ternal Revenue Service for the period in which the offer

in compromise has been submitted will not be required

to submit a payment with an offer in compromise sub-

mission. In cases where an offer in compromise is re-

jected, the payment amount will be applied to the tax li-

ability of the taxpayer that was ﬁ rst assessed.

XI. Collections

Taxpayers have a right to be informed in writing to

the

taxpayer’s last known address of possible collection ac-

tions that may be taken on delinquent taxes, including

referral to a collection agency.

Taxpayers have a right to be notiﬁ ed of any cost recov-

ery fee associated with any collection action.

Taxpayers have a right to have collection actions put on

hold in the case of hardship or while discussing their situ-

ation with the collector, supervisor, or senior manage-

ment, understanding that interest continues to accrue.

Taxpayers have a right to a prompt release of a lien upon

payment of a tax delinquency and all ﬁ ling fees.

Taxpayers have a right to have an incorrect lien correct-

ed or released and to have a letter of clariﬁ cation sent to

a credit reporting company.

Taxpayers have a right to have all other collection ac-

tions exhausted before a seizure of a taxpayer’s assets

takes place, unless the Department determines that the

interests of the State are in jeopardy.

Taxpayers have a right to have the following property

exempt from levy: wearing apparel; school books; fuel;

provisions; furniture; personal effects; books and tools of

a trade, business, or profession; unemployment beneﬁ ts;

and undelivered mail.

(This is a reproduction of the originally issued document)

Revised October, 2019

Page 44

Index to Instructions

ddress Change ........................................... 33

Address of Hawaii Department of Taxation ..... 6

Adjustments to Income ......................... 12 – 16

Amended Returns —

Balance Due (or Refund) ....................... 31

Change in Federal Taxable Income ....... 33

Filing .......................................... 30 and 33

Annuities ........................................................ 14

Attachments to Return .................................. 32

Balance Due (or Refund) .............................. 29

Birth or Death of Dependent ......................... 11

Blind, Deaf, or Totally Disabled Person ......... 22

Business Income —

Rents on Schedule E ............................. 31

Schedule C ............................................ 31

Schedule F ............................................ 31

Business Use of Your Home ......................... 21

Capital Gains and Losses ................. 23 and 39

Casualty and Theft Losses ........................... 20

Changes to Note ............................................. 2

Civil Unions ..................................................... 4

Contributions to Charity ................................ 19

Credit for Child and Dependent Care

Expenses ............................. 23 and 35 – 37

Credits Against Tax ........................... 23 and 25

Death of Taxpayer ........................................... 6

Dependents — Exemptions ............................ 9

Direct Deposit of Refund ............................... 30

Disability — Exemption ................................. 22

Divorced or Separated Parents ..................... 10

Domicile Deﬁ ned ............................................. 5

Earned Income Tax Credit ............................ 28

Educational Expenses .................................. 21

Employee Business Expenses...................... 21

Estimated Tax ...................................... 6 and 28

Exemptions.......................................... 9 and 22

Extension of Time to File ............................... 33

Filing Requirements —

Extension of Time to File ......................... 5

Filing a Final Return ................................ 6

When to File ............................................ 5

Where to File ........................................... 6

Which Form to File .................................. 5

Who Must File.......................................... 4

Who Should File ...................................... 5

Filing Status..................................................... 7

Hawaii Taxpayer Bill of Rights ....................... 43

Head of Household ......................................... 8

Income Tax Withholding ................................ 28

Individual Housing Accounts —

Distributions From.................................. 13

Payments to ........................................... 15

Tax Liability Upon the Sale or Transfer .. 13

Individual Retirement Accounts (IRAs) ......... 14

Interest Expense ........................................... 19

Interest Income ................................. 12 and 15

Interest — Late Payment of Tax .................... 33

Itemized Deductions — ......................... 17 – 22

You Choose to Itemize Deductions ........ 17

You MUST Itemize Deductions .............. 17

Married Persons —

Filing Joint Return ................................... 8

Filing Separate Returns ........................... 8

Special Rule for Aliens ............................ 8

Who Live Apart ........................................ 9

Medical and Dental Expenses ...................... 17

Miscellaneous Deductions ............................ 21

Multistate Tax Compact Act............................. 7

Net Operating Loss ........................... 16 and 30

Nonresident ..................................................... 5

Nonresident Alien —

Filing a Joint Return ................................ 8

Filing a Separate Return ......................... 8

Who Must File.......................................... 4

Part-Year Resident .......................................... 5

Payments (Amount You Owe) ....................... 30

Penalties and Interest —

Failure to Pay Tax After Filing Timely

Return ............................................... 33

Late Filing of Return .............................. 33

Underpayment of Estimated

Tax ........................................ 30 and 33

Pensions and Annuities ................................. 14

Political Campaigns — Hawaii Election

$3 Check-off ............................................ 32

Preparer — Did you have someone else

prepare your return? ................................ 32

Records — How Long to Keep ..................... 33

Refundable Food/Excise

Tax Credit ................................................. 23

Related Federal/Hawaii Tax Forms ................. 3

Reminders ........................................... 2 and 33

Rent — Income ............................................. 31

Resident .......................................................... 5

Retirement Plan Payments ........................... 14

Rounding Off to Whole Dollars ..................... 11

Same-Sex Marriage ........................................ 4

Social Security Number .................................. 7

Steps for Preparing Your

Return ........................... 7 – 11 and 32 – 33

Student Dependent — Exemption ................ 11

Tax —

Computation .............................. 23 and 39

Other —

Accumulation Distribution of Trusts .... 39

Computation of Tax for Children

Under Age 14 Who Have

Unearned Income of More

than $1,000 ................................... 23

Distributions from an Individual

Housing Account ............... 13 and 39

Lump-Sum Distributions ..................... 14

Parent’s Election to Report Child’s

Interest and Dividends .................. 39

Recapture of Capital Goods Excise

Tax Credit ...................................... 39

Recapture of Capital Infrastructure

Tax Credit ...................................... 39

Recapture of Important Agricultural

Land Qualiﬁ ed Agricultural Cost

Tax Credit ...................................... 39

Recapture of Low-Income Housing

Tax Credit ...................................... 39

Recapture of Tax Credit for Flood

Victims .......................................... 39

Sale of Your Home Purchase with

Proceeds from an Individual

Housing Account ........................... 13

Other Methods of Computing ................ 23

Tax Credits ........................................ 23 and 34

Tax Credits for Hawaii Residents —

Credit for Child and Dependent

Care Expenses ............. 23 and 35 – 37

Credit for Low-Income Household

Renters ......................... 23 and 34 – 35

Tax Rate Schedules ...................................... 42

Tax Tables ...................................................... 41

Taxes You CAN Deduct ................................. 18

Third Party Designee .................................... 32

When to File .................................................... 5

Where to File ................................................... 6

Where to Get Information ................................ 6

Which Form to File .......................................... 5

Who Must File ................................................. 4

Who Should File .............................................. 5

Withholding — Hawaii Tax ............................ 28

Worksheets ........................................... 37 – 40

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