Hibou Odoo Suite Enterprise: State of Hawaii: Filing State Income Taxes, W-2s, and 1099s

Purpose

The purpose of this documentation is to outline the processes and requirements associated with filing state income taxes as well as how to file W-2s and 1099s, if needed, in the state of Hawaii.

State Income Tax Withholding 

To determine the amount of income tax to withhold, employees should complete a Hawaii Employee's Withholding Allowance and Status Certificate (Form HW-4).  Every employee, on or before the date of commencement of employment, shall furnish his or her employer with a signed Form HW-4.

An employee may claim fewer, but not more, withholding allowances than the employee is entitled to claim. If you believe that an employee has claimed excessive allowances for their situation (generally more than 10) or has misstated their marital status, you should send a copy of the Form HW-4 for that employee to the Tax Assessor in the district tax office where you file your withholding tax returns.

If an employee does not furnish you with a Form HW-4, you are required to withhold tax as if the employee was single and had claimed no withholding allowance.

Employers are required to keep copies of completed HW-4 forms for their employees in their files. The forms serve as verification that state income taxes are being withheld according to the employee’s instructions and needs to be available for inspection if the state requests it. 

The Forms W-4 and HW-4 generally are valid until the employee provides new versions. The employee must furnish you with a new certificate within 10 days if there is a change in the employee’s marital status and the employee is no longer entitled to file a joint Hawaii income tax return or if the number of allowances the employee is entitled to claim is less than the number of allowances claimed by the employee on the certificate in effect.

Good to Know!

Hawaii does not allow an exempt status for withholding purposes.

State Income Tax Withholding Reporting and Deposits

Your annual State withholding tax liability determines when you remit the taxes to the State.

Tax remittance schedules:
FrequencyAnnual state withholding tax liability thresholdDueMethod of Payment
Quarterly< $5,00015th day of the month following the close of the preceding quarterly period. On-line with Quarterly Withholding Return or with paper Form HW-14 (Quarterly Withholding Tax Return)
Monthly$5,000 - $40,00015th day of the month following the close of the preceding monthly periodOn-line or with form VP-1
Semi-weekly> $40,000
Semiweekly: Wednesday, if taxes are withheld from wages, paid the immediately preceding Wednesday, Thursday, or Friday
--or--
Friday if taxes are withheld from wages paid the immediately preceding Saturday, Sunday, Monday or Tuesday.
On-line or with form VP-1 (must submit by EFT only if required to also remit federal employment taxes electronically via EFTPS)

Good to Know!

If depositing taxes on the same date for different filing periods (i.e., if taxes withheld from wages paid in two different months must be deposited on the same day), you must make two separate deposits and properly apply the deposits to the appropriate filing periods.

By the 15th of the month following the close of the quarter, you must file Form HW-14, (Quarterly) Withholding Tax Return either online or with a paper return.

If you contacted the Department and requested that a Hawaii Withholding Tax Return booklet be mailed to you (booklets are no longer automatically mailed to taxpayers), you should have received a tax return booklet containing a set of Form HW-14 quarterly withholding tax returns. 

W-2 and 1099 Forms 

Good to Know!

Whenever Form HW-2 is referred to below, commercially printed forms or the federal Form W-2 may be substituted, provided all the required information is shown on the substitute form. 

By February 28th:

  • File two copies of Form HW-3, Employer’s Annual Return and Reconciliation of Hawaii Income Tax Withheld from Wages, together with the Statements of Hawaii Income Tax Withheld and Wages Paid (copy A of Forms HW-2 or copy 1 of federal Forms W-2) by paper form or electronically

  • File the paper State transmittal Form N-196 along with applicable federal Forms 1099. Refer to the Instructions for Form N-196. (no electronic filing)

For further details, see the State of Hawaii Department of Taxation Booklet A Employer's Tax Guide

Good to Know!

The State of Hawaii participates in the combined federal/state electronic filing program. The Internal Revenue Service (IRS) will accept, upon prior approval, electronic files containing Hawaii reporting information. No other report to the Hawaii Department of Taxation is necessary.