State & Local Tax Impacts of COVID-19 for Hawaii – 2021

Thoughtware Alert Published: May 03, 2021 | Updated: Jun 11, 2021
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Information current as of May 30, 2021.

COVID-19 has changed 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

  • Hawaii has adopted rules outlined in IRS Rev. Rul. 2020-27 regarding pandemic relief loans for state income tax purposes. As such, businesses that expect to have their federal Paycheck Protection Program (PPP) loans forgiven can’t claim state deductions for expenses paid with those funds. If a state return has already been filed claiming deductions, businesses must file amended returns and remove them. Businesses may claim the deductions for expenses paid if they don’t expect forgiveness of a PPP loan, but if the loan is later forgiven, they will need to amend returns to remove the deductions.
    • Hawaii DOR, Tax Information Release 21-03, May 10, 2021.

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

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