Below is a list of income that can be subtracted on your Hawaii return:
Military Reserve or Hawaii National Guard
The first $7,345 earned by any member of the Reserve, Army, Navy, Air Force, Marine Corp or Coast Guard, is not taxed by Hawaii. If you qualify, enter the smaller of the two; your earned income amount or the $7,345.
Married persons filing a joint return may add the exclusion amount for both and enter that amount as a subtraction.
Payments to an Individual Housing Account
You can subtract up to $5,000 from your gross income; if you paid into a trust account that was established for saving for a down payment on your first principal residence. A married filing joint couple can deduct up to $10,000. (up to $5,000 for single; $10,000 for married)
Compensation to Hansen's Disease
Hawaii does not tax compensation by Hawaii or the U.S. to a patient affected with Hansen's Disease (leprosy).
Qualified bicycle commuting reimbursement
If you have qualified reimbursements that were not reported on your federal return, enter the subtraction on your Hawaii state return.
Exceptional Trees Deduction
You may subtract up to $3000 per exceptional tree for qualified expenses incurred to maintain an exceptional tree on you property.
Legal Services Plans
If you or your employer contributed to a legal services plan and you reported these benefits as taxable 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 any income obtained from patents, copyrights, trade secrets, or stock options from your Hawaii taxable income if this income was reported for federal purposes.
- 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.
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.
For additional information, please see Form N-11 Instructions.