States / Hawaii
HI state income tax · checked October 14, 2026
Does Hawaii tax tips and overtime?
Hawaii taxes overtime. Starting with 2026, it follows the federal tips deduction.
| Hawaii return | Tips | Overtime |
|---|---|---|
| 2025 | Taxed | Taxed |
| 2026 | Not taxed (follows federal) | Taxed |
The details
Hawaii’s 2025 conformity date was December 31, 2024, before the federal law passed, so neither deduction applies on 2025 Hawaii returns.
Act 35 of 2026 moved Hawaii’s conformity to December 31, 2025 for taxable years beginning after December 31, 2025. The Department of Taxation lists the section 224 tips deduction among the new provisions Hawaii conforms to, and the section 225 overtime deduction and the car loan interest deduction among those it does not.
The federal deductions apply either way. See who qualifies for no tax on tips, how the overtime deduction works, and where both go on Schedule 1-A.
States with the same 2026 treatment
All 50 states and D.C. · Georgia · Idaho
Questions
Does Hawaii tax tips in 2026?
For 2026, Hawaii doesn’t tax the qualified tips you deduct on your federal return.
Does Hawaii tax overtime in 2026?
For 2026, Hawaii taxes overtime in full.
What about my 2025 Hawaii return?
For 2025, Hawaii taxes tips in full. For 2025, Hawaii taxes overtime in full.
Does the federal deduction still apply?
Yes. Whatever your state does, you can still claim the federal deductions on Schedule 1-A if you qualify: up to $25,000 of qualified tips per return and up to $12,500 of qualified overtime ($25,000 joint), phasing down above $150,000 of MAGI ($300,000 joint).