§235-55.75 Refundable earned income tax credit. (a) [Repeal and reenactment on December 31, 2027. L 2023, c 163, §5.] Each qualifying individual taxpayer may claim a refundable earned income tax credit. Unless otherwise provided by law, the tax credit, for the appropriate taxable year, shall be forty per cent of the federal earned income tax credit allowed and properly claimed under section 32 of the Internal Revenue Code and reported as such on the individual's federal income tax return.
(b) For a part-year resident or a nonresident, the tax credit shall equal the amount of the tax credit calculated in subsection (a) multiplied by the ratio of Hawaii adjusted gross income to federal adjusted gross income.
(c) For purposes of this section, "qualifying individual taxpayer" means a resident or nonresident individual that:
(d) The credit allowed under this section shall be claimed against the net income tax liability for the taxable year. If the tax credit claimed by the taxpayer under this section exceeds the amount of the income tax payments due from the taxpayer, the excess of credit over payments due shall be refunded to the taxpayer; provided that the tax credit properly claimed by a taxpayer who has no income tax liability shall be paid to the taxpayer; provided further that no refunds or payments on account of the tax credit allowed by this section shall be made for amounts less than $1. All claims, including amended claims, for a tax credit under this section shall be filed on or before the end of the twelfth month following the close of the taxable year for which the credit may be claimed. Failure to comply with the foregoing provision shall constitute a waiver of the right to claim the credit.
(e) No credit shall be allowed under this section for any taxable year in the disallowance period. For purposes of this subsection, the disallowance period is:
(f) The director of taxation:
(g) If nonrefundable credits claimed under this section for any of the four consecutive taxable years beginning after December 31, 2017, exceed the taxpayer's income tax liability for the original claim year, the excess of the tax credits over liability may be used as a credit against the taxpayer's net income tax liability in subsequent years until exhausted; provided that no credit carried forward under this subsection shall be used as a credit for a taxable year beginning after December 31, 2024. No nonrefundable credits claimed for the taxable year beginning after December 31, 2021, and carried forward under this section, shall be used as a credit for a taxable year beginning after December 31, 2025. [L 2017, c 107, §1; am L 2022, c 114, §2; am L 2023, c 163, §2; am L 2025, c 25, §1]