HawaiiHawaii law allows deductions for first-home savings deposits
Starting with tax years beginning in 2027, Hawaii residents may deduct eligible cash deposits into accounts used to buy a first home, within annual and lifetime limits.
What it does
For tax years beginning after December 31, 2026, individuals may deduct up to $20,000 a year in cash account deposits, or $40,000 for joint filers; the lifetime limit is $200,000.
Argument forPeople saving for a first home could lower their taxable income by deducting eligible account deposits, within the stated yearly and lifetime limits.
Argument againstAccount holders may have less flexibility because funds must stay in insured deposits and go toward a Hawaii home purchase or face withholding.
More detail
Hawaii law allows deductions for cash paid into an individual housing account. An individual may deduct up to $20,000 per year. Married couples filing jointly may deduct up to $40,000; couples filing separately share a $20,000 annual limit. The account must fund the taxpayer’s first principal residence in Hawaii. A home counts only if the taxpayer, or their spouse if married, had no interest in residential property during the five years before opening the account. Deposits withdrawn less than 365 days after they were made do not qualify for a deduction. These rules apply to taxable years beginning after December 31, 2026.
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Where it stands
- Introduced
- Adopted
Looking ahead
No hearings or votes scheduled.
History
- 2026
- Jul 9Received.Introduced
HousingTaxes & Budget