Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 3 - INDIVIDUAL INCOME TAX LAW › Section 18-235-55.7 - Income tax credit for low-income household renters

Current through June, 2024
(a) In general. Section
				235-55.7,
				HRS, provides an income tax credit for low-income household renters.
As used in this section:
"Adjusted gross income" shall be defined as set forth in
				  section
				  235-1, HRS.
"Dependent" shall be defined pursuant to section 152, IRC,
				  (dependent defined).
"Principal residence" means the dwelling place that
				  constitutes the principal place of abode of the taxpayer or the taxpayer's
				  immediate family in this State, as opposed to a dwelling which is used for
				  vacation, educational, or other temporary purposes.
"Qualified exemption" means an exemption which is allowed
				  under section
				  235-54, HRS. Persons
				  for whom an exemption is claimed must have physically resided in the State for
				  more than nine months during the taxable year. There are no exceptions to this
				  provision. Thus, a person who is out of the State for a period of three months
				  or more, for any reason (including attending school or business), shall not
				  qualify for an exemption.
"Rent" means the amount paid in cash for the taxable year
				  for the occupancy of a dwelling place which is not partially or wholly exempted
				  from real property tax. Rent shall not include any amounts claimed as a
				  deduction from gross or adjusted gross income for income tax purposes, or any
				  amount received as a rental allowance or subsidy from any source. For purposes
				  of claiming this credit, rent means the money paid for use of the dwelling only
				  and does not include ground rent, utilities, goods, services, and the
				  like.
"Resident taxpayer" shall be defined as an individual whose
				  entire income is subject to tax under chapter
				  235, HRS, as imposed by section
				  235-4,
				  HRS, without regard to source.
(b) Amount of tax credit. Each taxpayer with
				an adjusted gross income of less than $30,000, who has paid more than $1,000 in
				rent during the taxable year for which the credit is claimed, may claim a tax
				credit under section
				235-55.7,
				HRS. The amount of tax credit available is calculated by multiplying $50 by the
				number of qualified exemptions the taxpayer is entitled; provided that a
				resident individual who has no income or taxable income under chapter
				235, HRS, also may claim the tax
				credit. If a taxpayer or spouse is age sixty-five or older, the taxpayer may
				claim double the tax credit; however, no additional exemptions shall be granted
				for blindness, deafness, or total disability.
(c) Taxpayer may not be a dependent of
				another taxpayer. Even though a taxpayer is a resident of the State and is
				required to file a resident income tax return, the tax credit under section
				235-55.7,
				HRS, may not be claimed if the taxpayer qualifies as a dependent of another
				taxpayer under federal or state laws and rules, even if the taxpayer entitled
				to claim the dependency exemption does not take it. A dependent is defined in
				section 152, IRC, (dependent defined), and is illustrated by the following
				example.
Example:
Jane Doe, a full-time student, works
				  part time and earned $1,500 during the taxable year. Jane is required to file a
				  Hawaii resident income tax return. Her father furnished over fifty percent of
				  her support. Although Jane's father is entitled to claim her as a dependent on
				  both his federal and state income tax returns, he elects not to claim Jane as a
				  dependent on his state income tax return. Jane may not claim the tax credit
				  under section
				  235-55.7,
				  HRS, since she may be claimed as a dependent by her father.
(d) Maintenance of records. Taxpayers
				claiming this credit shall maintain properly dated rent receipts. The receipts
				shall state the name of the taxpayer, the address of the dwelling for which the
				rent is paid, and the amount of rent paid, to substantiate the claim for the
				tax credit. Claims for the tax credit shall be made on forms approved by the
				department and are subject to section
				231-34,
				HRS.