Hawaii updates Code conformity — HAWAII — Withholding and Reporting
Hawaii’s Internal Revenue Code (Code) tie-in date moves to February 9, 2018, for tax years beginning after 2017. The prior Code conformity date was December 31, 2016, for tax years beginning after 2016. The date change applies to corporate and personal income taxes. However, the state decouples from many federal provisions.
Inoperative provisions. The Code provisions that do not apply for Hawaii purposes include:
- §67(g), suspending miscellaneous itemized deductions;
- §68(f), temporarily repealing the overall limitation on itemized deductions;
- §132(f)(8), suspending the qualified bicycle commuting reimbursements exclusion; and
- §217(k), suspending moving expense deductions.
Hawaii also does not adopt the Tax Cuts and Jobs Act changes made to Code §274. The federal law eliminates business expense deductions for most entertainment costs and commuting benefits after 2017. It also eliminates business expense deductions for some employer-provided meals after 2025.
Partnerships. Hawaii generally conforms to Code §§6221, 6222, 6223, 6225, and 6226, relating to partnership audits. Partnerships that elect under Code §6221(b) to opt out of the new rules for federal purposes must make the same election for state purposes.
The state also generally adopts the definitions and special rules for partnerships in IRC §6241. However, it does not adopt the definitions in:
- §6241(1) - partnership;
- §6241(3) - return due date; and
- §6241(5) - partnerships having principal place of business outside United States. (Act. 27 (S.B. 2821), Laws 2018, applicable as noted above.)
Source: Wolters Kluwer