How Hawaii taxes retirement income

Some 2026 figures pending confirmation Tax year 2026 · research last updated October 2, 2026

Hawaii doesn't tax Social Security benefits.
Exclusions and subtractions for retirement income (details below):
- Employer-funded pension exclusion.
Rates for 2026: 1.4% to 11%, graduated.

At a glance

Income tax	Yes
Rates (2026)	1.4% to 11%, graduated
Starts from	Federal adjusted gross income (AGI)
Standard deduction	$8,000 single, $16,000 married filing jointly
Personal exemption	$1,144 per person
Age 65 and older	$1,144 extra exemption per person
Social Security	Not taxed
Retirement income exclusions	1 (see below)
Roth conversions	Taxable
Capital gains	Special treatment (see below)
Local income tax	None

Tax rates

Brackets apply to Hawaii taxable income. Other filing statuses are in the rules reference.

Rate	Single: taxable income	Married filing jointly: taxable income
1.4%	$0 to $9,600	$0 to $19,200
3.2%	$9,600 to $14,400	$19,200 to $28,800
5.5%	$14,400 to $19,200	$28,800 to $38,400
6.4%	$19,200 to $24,000	$38,400 to $48,000
6.8%	$24,000 to $36,000	$48,000 to $72,000
7.2%	$36,000 to $48,000	$72,000 to $96,000
7.6%	$48,000 to $125,000	$96,000 to $250,000
7.9%	$125,000 to $175,000	$250,000 to $350,000
8.25%	$175,000 to $225,000	$350,000 to $450,000
9%	$225,000 to $275,000	$450,000 to $550,000
10%	$275,000 to $325,000	$550,000 to $650,000
11%	$325,000 and up	$650,000 and up

Hawaii doesn't tax Social Security benefits.

Pensions, IRAs and 401(k)s

Employer-funded pension exclusion (Form N-11 line 13; HRS 235-7(a)(2)-(3), HAR 18-235-7-02/03)

Applies to: government pensions, military pensions, employer funded private pension, employer funded profit sharing, rmd from pension plan, rollover ira of employer funded plan

Unlimited exclusion, no age test, for distributions paid by reason of retirement, disability or death that are attributable to EMPLOYER contributions: (1) public retirement systems (federal civil service/CSRS/FERS annuity, military, state/county ERS) unless the employee made voluntary contributions under an elective right; (2) private employer pension/profit-sharing/defined-benefit/defined-contribution plans where the employee did not contribute; (3) required minimum distributions at 73 from a pension plan, even if still working. TAXABLE: distributions attributable to employee elective contributions — 401(k) salary deferrals, SARSEP salary-reduction, Federal Thrift Savings Plan, 457 plans (incl. State of Hawaii Deferred Compensation Plan) — and self-funded vehicles: traditional IRAs not funded through an employer SEP, and private annuities (taxable to the extent federally taxable, i.e., net of nondeductible basis per Form 8606). Private pensions to which the employee contributed are partially taxable. Hybrid plans (401(k) with employer match or profit-sharing component, SEP with employer contributions plus salary reduction) are split using Schedule J: the employer-contribution share is exempt, the elective-deferral share is taxable. A rollover IRA keeps the character of the original plan (rollover of an employer-funded pension received at retirement stays exempt; rollover of a lump sum received on separation before retirement is taxable). Early distributions subject to the federal 10% penalty are fully taxable.

Roth conversions

A Roth conversion counts as taxable income for Hawaii. Whether a retirement income exclusion can cover part of it depends on the rules above.

Capital gains

Alternative tax: net capital gain (long-term) is taxed at a maximum 7.25%. HRS 235-51(f) (quoted as current law in HB 269 (2025)) caps the tax at the tax on the greater of (i) taxable income reduced by the net capital gain or (ii) the amount of taxable income taxed at a rate below 7.25%, plus 7.25% of the rest. Under the Act 46 brackets used for 2026 (7.2% bracket up to $48,000 single/MFS, $96,000 joint, $72,000 HOH; 2025 Schedule I) the floor (ii) is $48,000 single/MFS, $96,000 joint, $72,000 HOH, and the worksheet only helps when taxable income exceeds it. DOTAX's 2025 Tax on Capital Gains Worksheet line 12 still prints the pre-Act 46 amounts $24,000 / $48,000 joint / $36,000 HOH , which overstate the tax by up to $60 / $120 / $90; the statute controls (pe-triage/west.md HI-1). Otherwise ordinary rates. Short-term gains are ordinary.

Credits and relief for older residents

Refundable Food/Excise Tax Credit (Form N-311): federal AGI under $60,000 ($40,000 single) — amount scales with AGI and exemptions.
Credit for low-income household renters and other low-income credits (Schedule X) — income-tested, small.

More detail from our research notes

Act 46 (SLH 2024) schedule: 2026 standard deduction rises to $8,000 single/MFS, $12,000 HOH, $16,000 joint/QSS (from $4,400/$6,424/$8,800); 2026 brackets are the same as 2025 (widened brackets above). Brackets are statutory, not indexed. Personal exemption $1,144 per taxpayer/spouse/dependent (not indexed), plus an additional $1,144 exemption for a taxpayer/spouse 65 or older (for TY2025: 65 as of January 1, 2026 — i.e., the federal 'born before Jan 2' convention). Social Security and Tier 1 railroad retirement are fully exempt (line 14). Roth conversions are taxable to the extent federally taxable unless the converted money traces to an employer-funded pension received upon retirement (DOTAX's own example: a lump sum from an employer-funded profit-sharing plan received upon retirement, rolled to an IRA, then converted — the conversion is exempt; if the lump sum was received on separation before retirement, the conversion is taxable). The general planning rule: employer-funded pensions exempt; IRA/401(k) money from the employee's own deferrals and its earnings taxable. 2027 changes (not 2026): Act 24, SLH 2026 (SB 3125 CD2, signed May 21 2026) replaces the 2027 and 2029 bracket tables and adds a 13% rate over $1,000,000 joint / $750,000 HOH / $500,000 single-MFS from TY2027; Act 35, SLH 2026 (HB 2329 CD1, signed May 26 2026) raises the standard deduction to $9,000/$18,000/$13,500 (2028), $10,000/$20,000/$15,000 (2030) and $12,000/$24,000/$18,000 (2031). The 2027+ brackets in DOTAX Announcement 2024-03 are superseded; see research/states/scheduled.json HI. Because the 7.2% bracket moves up, the capital gains alternative-tax floor becomes $125,000 / $250,000 / $187,500 (2027) and $175,000 / $350,000 / $262,500 (2029). Tax table must be used for taxable income under $100,000 ($50 bands, midpoint).

Pending confirmation

These points were still being confirmed against Hawaii's published 2026 forms when this page was built. Most are waiting on forms the state publishes around the turn of the year.

6 items

2026 N-11 and instructions not yet published (DOTAX posts them about Dec 2026-Jan 2027: https://tax.hawaii.gov/forms/a1_b1_1income/). The 2026 values themselves are now confirmed in enacted text: Act 35 (2026) HRS 235-2.4(a)(2)(F) $8,000 / $12,000 HOH / $16,000 joint for years after Dec 31 2025 ; Act 24 (2026) reprints the 'after December 31, 2024' bracket tables unchanged and its new tables apply only after Dec 31 2026 (sec. 9(2)).
Age-65 additional exemption date convention for 2026 (expected: 65 as of January 1, 2027).
Food/excise tax credit amounts for 2026 not captured.
Capital gains alternative 7.25% rate: Act 24 (2026) amends only HRS 235-51(a)-(c), so 235-51(f) and the 7.25% rate are unchanged for 2026 and later. Confirm on the 2026 N-11 capital gains worksheet.
Capital gains alternative-tax floor: the statute (HRS 235-51(f), income taxed below 7.25%) gives $48,000 single/MFS, $96,000 joint, $72,000 HOH, which is what is used; DOTAX's 2025 N-11 worksheet line 12 prints $24,000 / $48,000 / $36,000 (pre-Act 46). Recheck the 2026 N-11 worksheet when released.
Exact Schedule J method for splitting hybrid-plan (401(k) with employer match) distributions not captured; Taxtirement should let the user state the employer-funded share.

Sources

Every figure comes from these documents, mostly the state's own forms, instructions and statutes.

Act 46 standard deduction and bracket schedule by tax year (DOTAX Announcement 2024-03)https://files.hawaii.gov/tax/news/announce/ann24-03.pdf
2025 Form N-11 instructions: pension exclusion rules (line 13), rollover/Roth conversion examples, SS exempt (line 14), $1,144 exemptions and 65+ extra, capital gains alternative tax, food/excise credit, 2025 tax table; Itemized deductions (group-d, 2026-10-02): N-11 2025 instructions pp.15-20 and worksheets p.32 (medical over 7.5% of Hawaii AGI, no SALT cap, income tax deductible under federal AGI $100k/$150k/$200k, 3%/80% limitation over $166,800 / $83,400 MFS); HB 2329…https://files.hawaii.gov/tax/forms/2025/n11ins.pdf
DOTAX Tax Review Commission presentation (July 14, 2026): HRS 235-7(a)(2)-(3), HAR 18-235-7-03; IRA/401(k) withdrawals from employee contributions fully taxablehttps://files.hawaii.gov/tax/stats/trc/docs2025/2026-07-14-Karacaovali_Presentation-Pension_Income_Taxation.pdf
Tax Announcement 98-2: employer-contribution distributions exempt; elective contributions (e.g., 401(k)) taxablehttps://files.hawaii.gov/tax/news/announce/1990_2003/98ann02.htm
2026 legislation: 13% rate over $1M effective 2027 (secondary)https://taxnews.ey.com/news/2026-1440-hawaii-legislation-establishes-higher-personal-income-tax-on-income-over-1-million
Act 24, SLH 2026 (SB 3125 SD1 HD1 CD2), as signed May 21 2026 (Gov. Msg. 1124): HRS 235-51(a)-(c) tables for years after Dec 31 2024 (unchanged), 2026 and 2028; sec. 9(2) applicabilityhttps://data.capitol.hawaii.gov/sessions/session2026/bills/GM1124_.PDF
Act 35, SLH 2026 (HB 2329 HD1 SD1 CD1), as signed May 26 2026 (Gov. Msg. 1135): HRS 235-2.4(a) standard deduction steps 2026/2028/2030/2031https://data.capitol.hawaii.gov/sessions/session2026/bills/GM1135_.PDF

Taxtirement's Hawaii calculation is also checked against a second, independent implementation on 1,000 random households. How we check our numbers.

See your own years. Taxtirement applies these Hawaii rules, and the federal and Medicare rules, to your household for every year of retirement, and shows the calculation behind each number. Coming November 2026 for iPhone, iPad and Mac.

This page summarizes Hawaii's 2026 rules as Taxtirement applies them, for education and planning. It isn't tax advice, and it doesn't cover every situation (for example part-year residents, businesses or military-only provisions). Rules change; check the state's current instructions, or a tax professional, before you act. Spotted something wrong? Tell us.