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Taxation of Employee Benefits: Hawaii

Taxation of Employee Benefits requirements for other states

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

Author: Vicki M. Lambert, The Payroll Advisor


  • Hawaii follows the federal rules for the taxation of salary deferrals to IRC § 125 cafeteria plans and § 401(k) plans for purposes of state income tax withholding, but it treats contributions to cafeteria plans differently for purposes of unemployment insurance tax. See Salary Deferrals to IRC § 125 Cafeteria Plans and § 401(k) Plans.
  • Same-sex marriage has been legal in Hawaii since December 2, 2013. Benefits provided to an employee's same-sex spouse, and/or their dependents, are not subject to state income tax withholding. The same rules apply to employees in same-sex civil unions. See Same-Sex Couple Health Insurance Benefits.