Hawaii does have a state income tax, and it applies to most residents and workers

Hawaii charges a state income tax on wages, self-employment income, and other earnings. Unlike some states that have no income tax at all, Hawaii taxes resident income at rates that range from 1.4% to 11%, depending on how much you earn. If you live in Hawaii or work there, you will owe state income tax unless you fall into a narrow group of people the state exempts.

The tax is progressive, meaning the rate increases as your income goes up. A single person earning $20,000 pays a different rate than someone earning $100,000. Hawaii also taxes income earned by non-residents if they work in the state, though the rules differ slightly from those for residents.

Key Takeaways

  • Hawaii residents pay state income tax on all income sources at rates between 1.4% and 11%, with higher earners paying higher percentages.
  • Non-residents who work in Hawaii must also pay state income tax on income earned within the state.
  • Hawaii has no sales tax, but it does charge a 4% general excise tax on most goods and services, which is different from income tax.
  • Military members stationed in Hawaii may be exempt from state income tax on military pay if Hawaii is not their state of legal residence.
  • You report Hawaii income tax on your state return, which is separate from your federal return.

How Hawaii income tax brackets work

Hawaii's income tax brackets change each year based on inflation. For the 2024 tax year, a single filer with taxable income under $2,400 pays 1.4%. As income rises, the rate steps up through several brackets, reaching 11% on income above roughly $48,000 for single filers. Married couples filing jointly have higher income thresholds before hitting each bracket.

The brackets explore to your taxable income, not your total earnings. You subtract the standard deduction (which varies by filing status) from your gross income first. For 2024, the standard deduction for a single filer in Hawaii is $2,700. This means you only pay tax on income above that amount.

Because Hawaii uses a progressive system, you do not jump into the highest bracket all at once. Only the income that falls within each bracket gets taxed at that rate. For example, if you earn $30,000 as a single filer, the first portion of your income is taxed at 1.4%, the next portion at a higher rate, and so on—you do not pay 11% on all of it.

Who must pay Hawaii state income tax

Hawaii residents must file and pay state income tax on all income from any source—wages, self-employment, rental income, investment income, and more. A resident is someone who lives in Hawaii and intends to stay, or someone who is physically present in the state for more than 183 days in a tax year.

Non-residents who work in Hawaii owe state income tax only on income earned within the state. If you live on the mainland but work remotely for a Hawaii company, or you work part of the year in Hawaii and part elsewhere, you report only the Hawaii-source income to the state. Non-residents file a different form than residents and may have different deduction rules.

Military members stationed in Hawaii are treated differently. If your state of legal residence (your home of record) is not Hawaii, you generally do not owe Hawaii income tax on your military pay, even though you work in the state. You would still owe tax on non-military income earned in Hawaii, such as a second job.

Hawaii's other taxes: excise tax and property tax

Hawaii has no sales tax, but it does charge a general excise tax of 4% on most goods and services. This tax is built into prices at the register, so you see it as part of the total cost. Some items like groceries and prescription drugs are exempt. This is not the same as income tax—it is a tax on purchases.

Hawaii also taxes real property. If you own land or a home in Hawaii, you pay annual property tax based on the assessed value. The rate varies by county and property type. Property tax is separate from income tax and is due each year regardless of whether you have income.

How to file Hawaii state income tax

You file Hawaii state income tax using Form N-11 (for residents) or Form N-11NR (for non-residents). These forms are available on the Hawaii Department of Taxation website. You report your income, claim deductions and credits, and calculate the tax you owe or the refund you are due.

If you use tax software, most major programs include Hawaii state forms and will walk you through the process. If you file by hand, you mail the completed form to the Hawaii Department of Taxation. The important date is the same as the federal important date—usually April 15, though it shifts if that date falls on a weekend or holiday.

If you are a non-resident, you must file a Hawaii return only if you had Hawaii-source income and owe tax on it. Some non-residents with small amounts of Hawaii income may not be required to file, but it is worth checking the department's rules or consulting a tax professional to be sure.

Tax credits and deductions available in Hawaii

Hawaii offers several credits that can reduce your tax bill. The Earned Income Tax Credit (EITC) is available to lower-income workers and is often worth hundreds of dollars. Hawaii also has a Child and Dependent Care Credit, a Dependent Exemption Credit, and credits for property taxes and rent paid. Some credits are refundable, meaning you can receive money back even if you owe no tax.

You can deduct the standard amount (based on your filing status) or itemize deductions if you have large expenses like mortgage interest or charitable donations. Hawaii follows federal rules for most deductions, though a few Hawaii-specific deductions exist. For example, you may be able to deduct contributions to a Hawaii college savings plan.

What happens if you do not pay Hawaii income tax

If you owe Hawaii income tax and do not pay, the state can assess penalties and interest on the unpaid amount. Penalties start at 5% of the unpaid tax and can go higher if the failure to pay is deemed intentional. Interest accrues daily at a rate set by the state, compounding the debt over time.

The Hawaii Department of Taxation can place a lien on your property, garnish your wages, or intercept your state and federal tax refunds to collect unpaid tax. If you cannot pay in full, the department may allow you to set up a payment plan. It is better to contact them early if you know you will owe and cannot pay by the important date.

Frequently Asked Questions

Do I have to pay Hawaii income tax if I just moved there?

If you moved to Hawaii partway through the year, you are a resident for the portion of the year you lived there. You owe Hawaii income tax on all income earned while you were a resident, even if you were not there for the whole year. Your filing status and deductions may differ from a full-year resident, so check the department's rules for your situation.

Can I deduct federal income tax from my Hawaii state tax?

No. Hawaii does not allow you to deduct federal income tax paid. You can deduct state income tax paid if you itemize deductions on your federal return, but that does not reduce your Hawaii tax. The two tax systems are separate.

What if I work in Hawaii but live in another state?

You owe Hawaii income tax on the income you earn in Hawaii. You also owe tax to your home state on all income, including Hawaii income. Most states offer a credit for taxes paid to other states to avoid double taxation, so check your home state's rules. You may need to file returns in both states.

Are retirement income and Social Security taxed in Hawaii?

Hawaii taxes retirement income from pensions and 401(k) withdrawals, but it does not tax Social Security benefits. Military retirement pay is also exempt if you are not a Hawaii resident. If you receive a pension from a non-military source, you owe Hawaii tax on it.

How do I know if I am a Hawaii resident for tax purposes?

You are a resident if you live in Hawaii and intend to stay, or if you are physically present in the state for more than 183 days in a calendar year. The 183-day rule is a bright-line test—if you hit that threshold, you are a resident even if you did not plan to stay. Keep records of your days in and out of the state if your residency status is unclear.