Registration Requirements in Hawaii
All businesses in Hawaii must register with the Department of Commerce, and the Department of Consumer Affairs. Hawaii allows new businesses to register with these departments through their online business registration system found here:
In order to obtain a Hawaii Tax ID businesses will need to register with the Hawaii Department of Taxation at the following link:
S Corporation Tax
Hawaii recognizes the federal S-election, and Hawaii S corporations are not required to pay income tax to the state. However, individual S corporation shareholders will owe state tax on their share of the company’s income. S corporations must still file Form N-35 S Corporation Income Tax Return.
LLC’s and partnerships are not required to pay income tax to Hawaii. Business income is passed to partners who pay Hawaii income tax on their personal return. Partnerships and LLCs must still file N-20 Partnership Tax Return.
Hawaii allows S corporations having nonresident shareholders to file composite returns and make composite payments on behalf of some or all of their nonresident shareholders. The corporation must get a statement from each nonresident shareholder electing to be in the composite return stating that they elect to be included in the return. Composite taxes are filed on N-15, which can be found below
Partnerships are allowed to elect to file composite Hawaii nonresident income tax returns on behalf of partners, who are nonresidents and make composite payments for their share of Hawaii source income. This is completed on form N-15 Income Tax Return Nonresident found below:
Individual Income Tax
Hawaii has a static conformity with the Internal Revenue Code as it existed on December 31, 2019.
The starting point for computing Hawaii's personal income tax liability is the adjusted gross income.
Hawaii offers a state defined standard deduction and the amounts are as follows:
• Single or Married filing separately $2,200
• Married filing jointly, or Qualifying widow(er) $4,400
• Head of Household $3,212
You do have the option of using a state defined itemized deduction if you do not use the standard deduction.
Personal and dependent exemptions are offered and the amount is $1,144 per exemption.
Hawaii does not conform to the Internal Revenue Code (IRC) section 199A, also known as the QBI deduction.
Shareholders and partners with income assignable to Hawaii may need to file an individual income tax return that reflects their portion of Hawaii income. Shareholders and partners will report their income on Hawaii Form N-11.
Individual income tax brackets vary by income and filing status and are found below:
CARES Act Guidance
Hawaii specifically does not conform to the IRC Section 172 of the CARES Act regarding business net operating loss (NOL) provisions. Instead, Hawaii will retain its treatment of business NOLs, not allowing any carryback and allowing only an indefinite carryforward. They also decouple from the Section 461 regarding excess business loss.
S corporations and partnership returns must be filed on or before the 20th day of the fourth month following the close of the taxable year. If the date falls on a weekend or legal holiday, the return is due the following business day.
Individual income tax returns generally follow the federal due date and are due on the 20th day of the fourth month following the end of the tax year. If the date falls on a weekend or legal holiday, the return is due the following business day.
Both s corporations and individuals who expect to have a tax liability over $500 by the end of the tax year will need to make estimated payments. The due date for the payments are the 20th day of April, June, September, and January of the following tax year for calendar returns.
S corporations need to use form N-201V - Declaration of Estimated Income Tax For Corporations and S Corporations
Individuals use form N-200V - Declaration of Estimated Income Tax for Individuals
S corporations and Partnerships are granted an automatic 6 month extension of time to file your return. You do not have to file a form to request the extension.
This extension does not allow an extension to pay. If a balance will be due, businesses will need to make a payment in a timely manner.
Individuals are granted an automatic 6 month extension of time to file your return. You do not have to file a form to request the extension.
This extension only applies to the filing of the return and taxpayers will need to make a timely payment if a balance is due.
S corporations will be assessed a penalty for filing returns late. This penalty will equal 5% of the tax due per month, up to a maximum of 25%.
Failure to pay in a timely manner will result in a 20% penalty on any unpaid portion of tax due.
Interest will accrue at a rate of ⅔ of 1% per month.
Individuals who file late will also be subject to a 5% per month penalty up to a maximum of 25%.
Failure to pay the tax after filing a timely return is 20% of the unpaid balance.
If your business was formed or is located in another state, but generates income in Hawaii, it may be subject to Hawaii taxes. The rules for taxation of multistate businesses, including what constitutes nexus with a state for the purpose of various taxes, are complicated. If you run such a business, you should consult with a tax professional.
Hawaii Department of Commerce:
Hawaii Department of Taxation: