The implementation of this bill would specifically amend Chapter 235 of the Hawaii Revised Statutes to include the guidelines for claiming the child tax credit. It outlines eligibility criteria based on income brackets for different filing statuses: single, heads of household, and married couples filing jointly. The credit becomes available only to Hawaii residents, which is significant for ensuring that the benefits assist local families rather than transient populations. Additionally, the bill clarifies how custody arrangements affect who can claim the child as a qualifying child for the credit, providing clarity to parents in various familial situations.
House Bill 437 aims to establish a nonrefundable child tax credit for individual taxpayers in Hawaii filing their income tax returns. Under this proposed legislation, taxpayers would be able to claim a credit against their state individual net income tax for each qualifying child. The credit varies based on adjusted gross income, with higher amounts available for lower-income filers. This credit is designed to alleviate some of the financial burdens faced by families and support the economic welfare of residents with children.
While the intent behind HB 437 is to provide financial assistance to families, there may be points of contention among lawmakers regarding its fiscal impacts on the state's budget. Concerns may arise about the sustainability of the tax credit amid existing budgetary constraints, as well as debates over who truly benefits from the program. Some legislators might argue that a tax credit could disproportionately advantage wealthier families who file jointly, potentially leaving out lower-income households. Furthermore, the bill includes a provision that allows for credits to be claimed by noncustodial parents under certain conditions, which may lead to discussions about fairness and potential misuse.