2027 priority 2 of 3

Keep Working Families’ Tax Credits

Extend the earned income and food/excise tax credits before they expire.

Two credits that help Hawaiʻi families afford groceries and other basics are set to shrink after 2027 unless the Legislature acts. The child and dependent care tax credit also helps working parents with the cost of childcare.

$76M

that working families would lose in 2028 if the credits expire

78,000

households claim the state EITC each year

What is at stake

In 2023, Act 163 doubled two of Hawaiʻi’s most important credits for working families: the state Earned Income Tax Credit (to 40 percent of the federal credit) and the refundable food/excise tax credit, which helps offset the general excise tax on groceries and other basics.

Those expansions end after the 2027 tax year.

The timeline

  1. 2023Act 163 doubles the EITC and the food/excise credit.
  2. 2026The Legislature does not extend them (HB 2306 did not pass).
  3. December 31, 2027The expansions are repealed.
  4. 2028First tax year without them: an estimated $76 million less for working families.

What we are asking for

Extend both credits at their current levels, so families do not take a pay cut from the tax code in 2028.

The lowest-income families lose the most

Average loss per household in 2028 if the credits expire, by household income group. Three in four households in the lowest-income fifth would be affected, losing $460 on average.

Lowest 20%income under $44,700$347
Second 20%$44,700–$83,200$191
Middle 20%$83,300–$130,400$90
Fourth 20%$130,400–$203,800$70
Top 20%over $203,900$77

Average across all households in each group, including those who do not claim the credits. Source: Hawaiʻi Appleseed tax model, tax year 2028.

Single parents take the biggest hit

Loss in 2028 if the credits expire, by family type.

Family typeHouseholdsHouseholds losingAverage loss per householdTotal loss
Single parent63,90064%$524$33.5M
Couple with children110,30035%$260$28.7M
Single, no children185,20036%$45$8.4M
Couple, no children133,80025%$45$6.0M
All households493,000$76M

Source: same model as above.

Estimates: Hawaiʻi Appleseed tax model, tax year 2028; EITC claims from the Department of Taxation, tax year 2024.

Also on our agenda

We also support a refundable state Child Tax Credit of $650 per child aged 0–18, and RxKids, which would give cash payments to mothers in the first months of a child’s life. We will post updates here as those proposals move.

Help us keep these credits

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Our other 2027 priorities: Tax Profits Like Paychecks and Increase the Tax on Luxury Homes. See all three.