Questions & Answers

Are unemployment benefits, stimulus checks, or other COVID-19 (coronavirus) relief payments taxed in Hawaii?

The following relief payments are taxable both on your federal and Hawaii returns:

  • Unemployment Benefits
    • These include Pandemic Unemployment Assistance (PUA) and Federal Pandemic Unemployment Compensation (FPUC).
    • You should receive a 1099-G from the agency reporting the benefits (these are usually distributed in January). The form will show the amount of unemployment compensation you received during 2020 in Box 1, and any federal income tax withheld in Box 4. Report this information on the Unemployment Compensation Income (Form 1099-G) screen.
  • Lease and Rent Payments Received
    • Lease and rent payments received by landlords from an administering agency on behalf of the tenant are taxed the same as regular rent payments.
The following relief payments are not taxable on either your federal or Hawaii returns:

  • Economic Impact Payments (Stimulus Checks)
  • Paycheck Protection Program Loans (PPP)
    • Small business loans forgiven under this program can be excluded from gross income. However, business expenses paid with these loans are not deductible in Hawaii and will need to be included as an "other addition" to Hawaii income.
  • Lease and Rent Payment Assistance
    • Rental and mortgage assistance payments will not be subject to Hawaii income tax for the individual(s) to whom the assistance was provided, as the Department of Taxation views this type of assistance as nontaxable general welfare payments for the individual(s) that the assistance will benefit.
  • Students' Emergency Financial Aid Grants
  • Economic Injury Disaster Grants

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