Withholding Taxes: Hawaii

Federal law and guidance on this subject should be reviewed together with this section.

Author: Vicki M. Lambert, The Payroll Advisor

Summary

• Withholding is generally required on wages earned for services performed in the state. Certain nonresidents are subject to tax in Hawaii. See Residents, Nonresidents and Expatriates.
• All employees must provide their employer with a completed and signed Form HW-4, Employee's Withholding Allowance and Status Certificate, on or before the date employment begins. An employer may have to send copies of the form to the state tax Assessor in certain situations. See Employee's Withholding Allowance Certificate.
• Hawaii has an earned income tax credit but employers are not required to notify employees about it. See Earned Income Tax Credit.
• Withholding on supplemental wage payments, such as bonuses, is calculated differently depending upon whether the payments were made together with, or separate from, regular wages. See Supplemental Wages.
• All employers submit certain copies of Form HW-2 to all employees by January 31 of each year. Special rules apply to terminated employees. See Form W-2 Requirements.
• Employers are required to keep a set of specific tax records for as long as the statute of limitations remains in effect for the relevant tax return. See Recordkeeping Requirements.