Which distributions are eligible for the Hawaii Pension Exclusion?

Hawaii doesn't tax qualifying distributions from pension plans funded by your employer. For a distribution to qualify, it must be paid by a pension plan by reason of retirement, disability, or death.

The following three types of distributions are fully eligible for the Pension Exclusion:

1. Pension or annuity distributions from a public (i.e., government) retirement system (e.g., federal civil service annuity, military pension, state or county retirement system), unless you made voluntary contributions under an elective right.
2. Distributions from a private employer pension plan received upon retirement (including early retirement and disability retirement) if you did not contribute to the pension plan.
3. Distributions from a pension plan that were made to comply with the federal mandatory payout rule whether or not you are still working full time.

If you contributed to your private employer pension plan, your distributions received upon retirement are partially taxed.

Early distributions from a pension plan that are subject to the 10% federal penalty tax don't qualify.

Only distributions included in your federal taxable income are eligible. We've provided your total pension distributions that are federally taxable. If you have multiple distributions and only some qualify for this exclusion, you can generally find the federally taxable amount of each distribution in Box 2a of your 1099-R.

Enter any qualifying distributions regardless of the state they were from or where you were living when you received them.