State & Local Tax Impacts of COVID-19 for Hawaii

Thoughtware Alert Published: Dec 11, 2020
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Information current as of December 31, 2020.

The SARS-CoV-2 virus and the incidence of COVID-19 are changing life across the globe. Many taxing jurisdictions are taking mitigating actions to create social distance and aid taxpayers. The following is a running list of actions by jurisdiction, which generally result in additional time to file and/or pay. Further, many jurisdictions have closed their offices to in-person use by taxpayers and suspended their audit and administrative functions. This alert doesn’t cover similar waivers from local-level taxing authorities. These developments continue to quickly evolve; check with your BKD Trusted Advisor or visit our COVID-19 Resource Center for current information as needed.

Information Specific to Hawaii

  • Individual and corporate income tax returns and payments due between April 20 and June 20 are now due July 20. Taxpayers who are entitled to a refund or pay the tax due by July 20 will receive an automatic extension to file the associated return by Oct. 20. The relief does not apply to estimated income tax payments for the 2020 taxable year.
    • DOR Notice, March 23, 2020.
  • Hawaii provided clarification on various COVID-19 tax relief. The economic impact payments and loan proceeds from the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan Emergency (EIDL) programs aren’t subject to state income tax. Payments under the Pandemic Unemployment Assistance (PUA) and Federal Pandemic Unemployment Compensation programs are subject to state income tax. General excise tax won’t be imposed on payments received under PUA, loan amounts forgiven under PPP and EIDL grants.
    • Hawaii DOR Tax Information Release No. 2020-02, April 29, 2020.
  • Hawaii issued guidance on the corporate income, individual income, and sales and use tax treatment of various COVID-19 relief programs and payments provided by the federal government. The economic impact payments, loan proceeds from the Paycheck Protection Program (PPP), and Economic Injury Disaster Loan (EIDL) Emergency Advances programs aren’t subject to state income tax. However, payments under the Pandemic Unemployment Assistance (PUA) and Federal Pandemic Unemployment Compensation programs are subject to state income tax. Rental and mortgage assistance payments aren’t subject to state income tax for the individuals to whom the assistance was provided, and general excise tax won’t be imposed on payments received under PUA, loan amounts forgiven under PPP, and EIDL grants. Lease and rent payments received by residential and commercial landlords through the various COVID-19 assistance programs that benefit their tenants are subject to the general excise tax, as regardless of the source of the funds, the landlords are receiving income in exchange for use of residential or commercial real property by their tenants.
    • Hawaii DOR Tax Information Release No. 2020-06, October 20, 2020.

For more information, reach out to your BKD Trusted Advisor or use the Contact Us form below.

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