Hawaii State Tax Routine (HITX)

The Hawaii State Tax Routine (HITX) Special Routine processing utilizes the following steps:

Line 1

Multiply the employee’s gross wages for the current payroll period by the number of payroll periods in a year to obtain their Annualized Gross Income (HI).

Line 2

Determine the employee’s personal exemption credit*.

Line 3

Determine the Taxable Amount by subtracting Line 2 from Line 1.

Line 4

Determine the Standard Deduction Allowance (Maximum SDA in TAXP).

Line 5

Determine Wages subject to withholding by Subtracting employee’s SDA (Line 4) from Taxable Amount (Line 3).

Line 6

Using the Marginal Tax Rates (DEDX) entries for the Hawaii State Tax Routine deduction, compute tax on the Taxable Amount.

Line 7

Divide the amount on Line 6 by the number of payroll periods in a year to determine the employee’s Hawaii Withholding Tax for the pay period.

*Determine the Employee Personal Credit

  1. Take the Annual Exemption Amount on the Tax Parameters (TAXP) entry for the employee’s State Tax deduction multiplied by the number of State Tax Allowances on the Employee Tax Parameter (TAX).

Data Setup Considerations

Sites need to ensure that they have implemented the following Business Process/Data Setup Changes at their site prior to Hawaii State Tax Routine.

  1. The Tax Parameters (TAXP) setup for Hawaii.

  1. Personal Exemption Amount is captured as a part of Annual Exemption Amount.

  2. Standard Deduction Amount is captured as a part of maximum Standard Deduction.

  1. The Employee Tax Parameter (TAX) enrollment

  1. The State Tax Allowance field captures the employee’s claim for the number of exemptions.

Note: The point 2 functions if the MULTI_STATE_TAX parameter is set to N as part of the application Parameter (APPCTRL) page, if the parameter is set to Y, then the system functions as per point 3.

  1. Employee enrolled in the State Tax Enrollment (TAXS) (Note: this only applies to employees enrolled in the State Tax Class (TAXCS) that includes Hawaii’s State Tax Deduction).

  1. The State Tax Allowance field captured the employees’ claim for the number of exemptions.