Below is a list of income that can be subtracted on your Hawaii return:
Military Reserve or Hawaii National Guard
Hawaii does not tax the first $8,082 received by each member of the reserve components of the Army, Navy, Air Force, Marine Corps, Coast Guard of the United States, and Hawaii National Guard.
If you qualify, enter the smaller of $8,082, or the pay you received shown on Box 16 of the Form W-2.
If you are married and filing a joint return and the spouse qualifies, add the subtraction from income for both.
Payments to an Individual Housing Account
You may subtract up to $5,000 paid in cash during the taxable year into a trust account that was established for saving for a down payment on your first principal residence.
If married filing a joint return, you may subtract up to $10,000.
Compensation to Hansen's Disease
Hawaii does not tax compensation by Hawaii or the U.S. to a patient affected with Hansen's Disease (also known as leprosy).
Qualified bicycle commuting reimbursement
If you have qualified reimbursements that were not excluded on your federal return, enter the subtraction on your Hawaii state return.
Exceptional Trees Deduction
You may subtract up to $3,000 per exceptional tree for qualified expenses incurred during the taxable year to maintain an exceptional tree on your private property.
Legal Services Plans
If you received benefits from a qualified group legal services plan or if your employer contributed to a legal services plan and you reported these benefits or contributions as taxable income on your federal return, you may be able to list them as a subtraction on your Hawaii return. Check with your plan to see if it qualifies under Hawaii standards.
Certain Income from a Qualified High Technology Business
You may subtract Royalties and other income derived from patents, copyrights, trade secrets, or stock options from your Hawaii taxable income if it was reported for federal purposes.
Individual Development Account
You may subtract contributions made to an individual development account as well as interest earned by the account.
Annual Pension Exclusion
Hawaii does not tax distributions from qualified employer funded pension plans. If your pension distribution was 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 county retirement system), enter the qualifying amount as a subtraction.
Taxable State Refund
If you entered your state refund on your federal return for federal purposes, you may enter this amount as a subtraction on your Hawaii return.
Other Subtractions
- 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.
- Expenses not allowed on your federal return because they were connected with federal credits.
- Unearned income of children that was included on your federal return, if the children are filing Hawaii returns.
- Differences in the deduction for student loan interest.
- Differences in the taxable portion of employer provided adoption benefits.
- Moving Expenses
- Undistributed income earned by certain foreign corporations.
For additional information, please see Form N-11 Instructions.