What to Know About 2025 Tax Season in Hawaii

When tax forms start to arrive in January, are you filled with a sense of dread? Tax season is here, but the good news is that it doesn't have to be stressful. In fact, with some basic information about how taxes are calculated, understanding how tax brackets work, and a little familiarity with tax deductions and credits, you may even feel ready to file taxes on your own.

With Hawaii's 12 tax brackets (the most of any state) and several state-specific rules and tax breaks, filing taxes in Hawaii can be complex. But once you know the basics, you’ll be ready to file.

Here are a few things to know before you file your 2024 tax return in Hawaii.

New Rules and Tax Changes

The IRS and state of Hawaii are always making small — and sometimes big — changes to tax rules. The most recent tax year included some minor updates from the IRS and a major update from the state. Here’s what to expect as you file your return for 2024.

• You might get a new form: If you receive payments that equal more than $5,000 on platforms like Etsy and Venmo, you can expect to receive a 1099-K tax form. You might have to pay taxes on the earnings, but it depends on the situation.
• Penalty-free retirement withdrawals: You might not have to pay early withdrawal penalties if you took money from a retirement account for newly eligible expenses, including medical bills, car repairs, and other emergency expenses. According to the new rule, you can withdraw up to $1,000.
• Higher standard deduction: Hawaii recently passed a tax cut bill and the first change begins this year with a higher standard deduction. The new deduction amounts are $4,400 for single filers and $8,800 for joint filers. As a result, you may pay less state income taxes.

Earned Income Tax Credit and Child Tax Credit

Tax credits are one of the most common and effective ways to lower your tax bill. For low to moderate income earners, the earned income tax credit (EITC) gives working taxpayers a federal tax credit ranging from $632 to $7,830 depending on the number of dependent children claimed on their return.

The child tax credit (CTC) is worth up to $2,000 for each dependent child under age 17. However, higher income phaseouts do apply to the CTC.

If you use tax software or work with a tax professional, they should walk you through all the steps to determine how any applicable tax credits, including the EITC and the CTC, may benefit you.

Free Hawaii Tax Preparation

You don't have to navigate all of the tax forms yourself or pay hefty fees to have someone file your return for you. There are several options for free tax preparation in 2025.

The IRS's Volunteer Income Tax Assistance (VITA) program provides free basic tax return preparation for people who:

• Make $67,000 or less per year
• Have disabilities, or
• Speak limited English

Tax Counseling for the Elderly (TCE) programs provide free basic tax return preparation, primarily for people 60 years of age and older.

You can find a nearby location and contact information for a site near you using the VITA/TCE Locator Tool.

Bank of Hawaii and Goodwill have also teamed up to provide free 2025 tax preparation services for Hawaii residents. You can find a location and learn more about the program at Goodwill Hawaii.

Hawaii Tax Deadline

The federal tax deadline for your 2024 tax return is April 15, 2025. For Hawaii residents, the deadline to file your 2024 state tax return is April 21, 2025.

If you need more time to gather your paperwork, you can request an extension with the IRS, giving you up to six extra months to file. Just keep in mind that while the extension gives you more time to file your tax return with the IRS, it does not provide more time to pay the amount you owe for 2024. If you expect to owe tax, you'll need to estimate what you owe and make a payment by April 15 to avoid penalties or fees.

Hawaii tax extensions are automatic, so you don't have to submit a form or application as long as you pay 100% of what you owe by the tax deadline and file your state income tax return within six months. You can submit your Hawaii tax payment on Form N-200V.

This material has been prepared for informational purposes only, and is not intended to provide nor should it be relied upon for tax, legal or accounting advice. Please consult your tax, legal and/or accounting advisors for your specific situation.