LIHUE — A new online website designed to assist Hawaii residents learn more about the state’s income tax cut and help calculate their estimated tax savings for the next six years has officially launched.
In 2024, the state of Hawaii passed Act 46, which marked the largest income tax cut deduction in the state’s history. Act 46 incrementally increases the standard deduction, meaning a larger portion of income won’t be taxed, leading to lower overall taxes for those who take the standard deduction. It also changes the tax bracket from tax year 2024 through tax year 2031.
On Tuesday, Governor Josh Green, M.D., along with the state Department of Taxation, introduced ‘Tax Cut Hawaii,’ a new website designed to help residents understand the tax law for future planning.
“With our historic tax cut in effect, thousands of working families statewide are now seeing more money in their paychecks and bigger tax refunds, with even more savings on the way,” said Governor Green.
“This means real incremental financial relief for local households—helping families cover essentials like groceries, rent, and childcare. I thank the Legislature for enacting the largest tax cut Hawaii has ever seen, making life more affordable for kamaaina.”
The website features a tax rate calculator that allows individuals and families to estimate their tax reductions and take-home income. It also has a comprehensive, frequently asked questions section that answers questions for taxpayers and businesses about the tax cut, changes to withholding amounts, and potential savings.
Along with educational resources that provide information on the new Hawaii tax brackets and what tax relief means for financial planning. While all tax-paying residents will see savings, the most significant relief will be households earning $150,000 or less. For example, a family of four making $88,000 a year will save about $20,000 in state taxes over the next five years.
The changes are automatically applied when taxpayers file their 2024 state tax return. As of January 1, 2025, employers and payroll providers have already implemented the Department of Taxation’s updated withholding tables. As a result, employees should see less state income tax withheld from their paychecks compared to 2024.
Before this law, Hawaii had one of the highest income tax burdens in the country. These changes aim to make life more affordable for the people living and working on the islands.
For further information on the new Hawaii tax brackets or to calculate your tax rate, visit TaxCutHawaii.org.
