HONOLULU — Hawai‘i taxpayers will be receiving constitutionally mandated tax rebates over the next several weeks after a rebound in tourism fueled a jump in state tax revenue.
The money will arrive either by bank direct deposit or by paper check via mail, Gov. David Ige said Tuesday.
Individuals who earned less than $100,000 and couples who earned less than $200,000 in 2021 will receive $300 per person, plus another $300 for each dependent. For a family of four, the payout could total $1,200.
Those earning more will receive rebates of $100 per person and dependent. Eighty-nine percent of taxpayers (about 537,000 individuals) will get the $300 rebate, and 11% (about 64,000) will receive $100.
Taxpayers who filed individual income-tax returns for 2021 by July 31 and who have been residents of Hawai‘i for at least nine months will receive the refund. They won’t need to take further action to receive their money, Ige said. Those who file by Dec. 31 may also receive the rebate.
“We do know that there are many challenges in these tough economic times. The current inflation, gas and electricity costs have been increasing. So we know this refund will be welcomed,” Ige said at a news conference.
The first direct-deposit refunds, about 100,000, will arrive in bank accounts on or around Monday, Sept. 12, and will continue over the next two weeks. The state Department of Taxation says two additional distribution dates are scheduled for this Friday, Sept. 9 and Tuesday, Sept. 13, which should complete the bulk of direct-deposit refunds.
People who requested their regular tax refunds by direct deposit and who gave the state their bank-account numbers will get their rebates this way.
Deposits through the mail will take longer due to an industry supply shortage of paper checks. These refunds should be completed by the end of Oct., he said.
Hawai‘i’s constitution requires the state to give money back to taxpayers or to put money into a rainy-day fund if its carry-over balance exceeds 5% for two consecutive years.
During this year’s legislative session, lawmakers did both. They passed a bill allowing for the refund and put $500 million in the state’s rainy-day fund.
The total payout amounts to $295 million for about 600,000 people, Ige said it’s the largest rebate he can remember the state paying in his three decades serving in the state Legislature and as governor.
Ige, who’s term is set to expire at the end of the year, kicked off his final legislative session by proposing rebates of $100. The state Legislature upped the ante by introducing the $300 means-tested refunds, which Ige signed into law in June.
Many families will see an even-larger tax benefit from changes to the Earned Income Tax Credit, which the Hawai‘i Tax Fairness Coalition estimates would to boost the incomes of 5,452 families by $420 on average while generating $2,840,179 in economic activity for Kaua‘i.
This tax credit is targeted at the lowest-income working-class families, who currently pay nearly 15% of their income toward taxes, compared to the 9% paid by the wealthiest residents, according to Hawai‘i Budget &Policy Center.
Unlike the one-time rebates, this tax credit is permanent.
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The Garden Island Reporter Guthrie Scrimgeour contributed to this article.
