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Summary of differences between federal and state regulations
Income tax withholding
Under the income tax law, employers are required to withhold Hawaii state income tax from their employees’ wages and to remit the amounts withheld to the Department of Taxation.
Hawaii tax law requires an employer to withhold State income tax from the employees’ wages and also requires that the tax withheld be held in trust by the employer for the State. Therefore, you, as the employer, will be liable for this tax should you fail, neglect, or refuse to withhold the amount of tax required from your employees’ wages, or should you fail to remit the amount required to the Department of Taxation.
An employee is someone who performs services for an employer. In general, if someone is told what to do, when to do it, and how to do it, and if the services are performed at the employer’s place of business with equipment and supplies furnished by the employer, then an employer/employee relationship exists, and the person is classified as an employee.
Unemployment taxes
All states finance UC primarily through contributions from subject employers on the wages of their covered workers. In addition, three states (Alaska, New Jersey, and Pennsylvania) collect contributions from employees. These taxes are deposited by the state to its account in the UTF in the Federal Treasury, and are withdrawn as needed to pay benefits.
Many states have adopted a higher tax base than what is provided in FUTA. Hawaii's wage base is usually higher and changes periodically. In all states, an employer pays a tax on wages paid to each worker within a calendar year up to the amount specified in state law. In addition, most of the states provide an automatic adjustment of the wage base if federal law is amended to apply to a higher wage base than that specified under state law. As a result of the many variables in states taxable wage bases and rates, benefit formulas, and economic conditions, actual tax rates vary greatly among the states and among individual employers within a state.
Hawaii has minimum and maximum rates that apply to experience rated employers only and do not include applicable surtaxes or penalties.
State
Contacts
Income tax withholding
Department of Taxation
Unemployment taxes
Department of Labor and Industrial Relations
Regulations
Income tax withholding
Hawaii Administrative Rules, Title 18 Chapter 235 Subchapter 3 Individual Income Tax Law
Unemployment taxes
Haw. Code R., Title 12, Department Of Labor And Industrial Relations, Chapter 5
Haw. Rev. Stat., Chapter 383 Employment Security Law
Federal
ContactsInternal Revenue Service
Regulations Title 26 Code of Federal Regulations, Internal Revenue