Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 1 - GENERAL PROVISIONS › Section 18-235-1.10 - Aliens

Current through June, 2024
(a) "Alien" means an individual who is not a
				United States citizen.
(b) An alien
				is a resident of Hawaii if the alien has permanent resident alien status (green
				card) and is domiciled in Hawaii, or resides in Hawaii for other than a
				temporary or transitory purpose. Thus, like all other individuals, the status
				of an alien as a resident or nonresident for Hawaii income tax purposes is
				determined by all of the factual circumstances.
(c) Hawaii has not adopted the federal
				provisions of Internal Revenue Code (IRC) section 7701(b)(with respect to the
				definition of resident alien and nonresident alien), and therefore, section
				7701(b) does not control for Hawaii income tax purposes. In addition, tax
				treaties between the United States and foreign countries do not apply to
				sub-nation states' taxing authority and therefore do not control for Hawaii
				income tax purposes.
(d) In certain
				situations, a taxpayer may be considered a nonresident alien for federal income
				tax purposes and a resident for Hawaii income tax purposes. In these
				situations, the special rules applicable to individuals who are considered
				nonresident aliens for federal income tax purposes will apply when the
				individual files a Hawaii resident income tax return.
Example 1:
N, a Hawaii resident, married O, a
				  citizen of Australia, while both were attending college in Hawaii. Upon their
				  graduation from college, they both found employment in Hawaii. After their
				  marriage, O filed the required documents and became a permanent resident
				  alien.
Conclusion: O is deemed to be a resident of Hawaii. O is
				  domiciled in Hawaii and became a permanent resident alien upon her marriage to
				  N.
Example 2:
P is a Japanese national who is
				  domiciled in Japan. In 1995, P moved to Hawaii to manage a Japanese company's
				  U.S. business operations. P was admitted by the United States Immigration and
				  Naturalization Service as a nonimmigrant alien. P's authorized stay can be
				  extended periodically. During 1995, P was physically present in Hawaii for more
				  than 200 days during the taxable year.
Conclusion: P is deemed to be a resident of Hawaii. Although
				  P is in Hawaii as a nonimmigrant alien, and is domiciled in Japan, P is in
				  Hawaii for other than a temporary or transitory purpose.
Example 3:
Q accepted a tenure track position
				  at the University of Hawaii, and arrived to begin employment on August 1, 1996.
				  Although Q entered the United States on a nonimmigrant alien visa, Q intends to
				  remain in the United States as a permanent resident alien and pursue tenure at
				  the University of Hawaii.
Conclusion: Although Q was not in Hawaii for more than 200
				  days in 1996, Q is in Hawaii for other than a temporary or transitory purpose.
				  Therefore, Q should file as a part-year resident for tax year 1996 even though
				  the 200 day test of the presumption of residency is not met.
Example 4:
Mr. and Mrs. R and their son are
				  citizens of Brazil and are in Hawaii on J visas. Mr. R is a teacher and does
				  not meet the substantial presence test under IRC section 7701(b)(3) and is,
				  therefore, a nonresident alien for federal income tax purposes. Mr. R files a
				  federal Form 1040NR on which his filing status is required to be married filing
				  a separate return. IRC section 6013(a)(1) does not allow the filing of a joint
				  return if either spouse was a nonresident alien at any time during the taxable
				  year. Mrs. R also works part-time in Hawaii. Mr. and Mrs. R and their son were
				  in Hawaii for more than 200 days in 1996 and will be filing as Hawaii
				  residents. Can Mr. and Mrs. R file a joint Hawaii resident tax return?
Conclusion: Section
				  235-93, HRS,
				  provides that a husband and wife, having that status for purposes of the IRC
				  and entitled to make a joint federal return for the taxable year, may make a
				  single return jointly of taxes under this chapter for the taxable year. Hawaii
				  has adopted the provisions of IRC section 6013(a)(1) through section
				  18-235-93(a)(2),
				  HAR. IRC section 6013(a)(1) provides that no joint return shall be made if
				  either the husband or the wife at any time during the taxable year is a
				  nonresident alien. Accordingly, Mr. and Mrs. R cannot file a joint Hawaii tax
				  return. Mr. and Mrs. R must each file separate Hawaii resident tax
				  returns.
Example 5:
The facts are the same as stated in
				  Example 4. Can Mr. R claim his son as his dependent on his Hawaii resident tax
				  return?
Conclusion: Section
				  235-54, HRS, provides
				  that the number of personal exemptions an individual may claim is in part
				  determined by ascertaining the number of personal exemptions that the
				  individual may lawfully claim under IRC section 151. IRC section 873(b)(3),
				  limits a nonresident alien individual to claim, under IRC section 151, a single
				  deduction for personal exemption unless the taxpayer is a resident of a
				  contiguous country or a national of the United States. IRC section 152(b)(3)
				  further states that the term "dependent," for purposes of determining personal
				  exemptions under IRC section 151, does not include any individual who is not a
				  citizen or national of the United States unless such individual is a resident
				  of the United States or country contiguous to the United States. For federal
				  income tax purposes, Mr. R cannot claim his son as a dependent since his son is
				  not a U.S. citizen, U.S. national, resident alien or resident of a country
				  contiguous to the United States. Accordingly, Mr. R cannot claim his son as a
				  dependent on his Hawaii resident tax return.
Example 6:
The facts are the same as stated in
				  Example 4. Can Mr. R claim the standard deduction on his Hawaii resident tax
				  return.
Conclusion: IRC section 63(c)(6), which Hawaii adopts
				  through section
				  235-2.4(a),
				  HRS, provides that a nonresident alien individual cannot claim the standard
				  deduction. Accordingly, Mr. R cannot claim the standard deduction on his Hawaii
				  resident tax return. Mr. R must itemize any allowable deductions.
Example 7:
Mr. and Mrs. S are in Hawaii on H
				  visas. Mr. S is a college professor. Mr. S meets the federal substantial
				  presence test but files a federal Form 1040NR to claim the treaty benefits
				  which exclude his wages as a professor from federal taxation for two years. Mr.
				  and Mrs. S were in Hawaii for more than 200 days in 1996 and will be filing as
				  Hawaii residents. Will the treaty also exclude Mr. S's wages from Hawaii
				  taxation?
Conclusion: The provisions of income tax treaties are
				  between the United States and the foreign country. Income tax treaties are
				  designed to protect taxpayers from double and discriminating taxation by either
				  treaty country, and normally do not preempt state tax laws. Accordingly, the
				  treaty has no effect on Hawaii income tax law and Mr. S's wages as a professor
				  are subject to Hawaii income tax.