HONOLULU — In high-cost Hawaii, where working families often have a tough time getting by, progressive groups are pushing for various tax credits this year. Several bills dealing with just how much tax relief families and homeowners should get will
HONOLULU — In high-cost Hawaii, where working families often have a tough time getting by, progressive groups are pushing for various tax credits this year. Several bills dealing with just how much tax relief families and homeowners should get will be on the agenda at the Hawaii Legislature next week.
Hoping to put more money in the pockets of low-income residents, lawmakers are considering offering an earned income tax credit to working families.
The tax credit already exists on the federal level, and in 2014, more than 100,000 people in Hawaii received a federal earned income tax credit which amounted to on average $2,200 per household, according to the Internal Revenue Service.
The bill, SB 2299, would create a state-level earned income tax credit equal to 10 percent of the federal earned income tax credit, or approximately $220 per filer.
More than half of states and the District of Columbia have their own earned income tax credits.
Nationwide, more than 28 million people received nearly $66 billion in federal earned income tax credits in 2014, according to the National Conference on State Legislatures.
But the Tax Foundation of Hawaii cautioned that administering the program will cost the state money that would have otherwise gone to government programs. The Senate Ways and Means Committee is planning to make a decision on the bill Tuesday morning.
Another tax credit proposal designed to encourage solar energy will be decided in the House Committee on Finance Tuesday afternoon. The bill, HB 212, is for battery backup systems for solar energy. It would offer a tax credit for 25 percent of the cost up to a pre-set cap. The caps listed in the bill were $10,000 for a single family residence or $250,000 for a commercial property.
When the bill was introduced last year, the state Consumer Advocate, Jeffrey Ono, said the proposal could be a game changer in terms of increasing the state’s use of renewable energy. But Ono said he’s worried the tax credit could end up benefiting only the wealthy, because battery backup systems are expensive.
