Hawaii No Ka Oi (Not)

(Image from CPA Practice Advisor)

Tax practitioners breathed a sigh of relief when the IRS extended the filing deadline for 2020 individual tax returns to May 17, 2021. More importantly, the April 15th payments due, if any, were also extended to May 17th. (In normal years the returns can be filed as late as October 15th if a simple extension form is completed, but the final payment must be made on April 15th nevertheless.)

Generally speaking, the States followed the IRS' lead in postponing the filing date and payments. Below is the ranking of States, including the District of Columbia, starting with those who are the most considerate of taxpayers' needs to the one which is the least accommodating.

The Best: States with No Individual Income Tax
AK, FL, NV, SD, TN, TX, WA, WY

Postponement to July 15
MD

Postponement to June 15
LA

Postponement to June 1
IA

Postponement of Returns and Payments to May 17 (37 incl DC)
AZ, AR, CA, CT, CO, DC, DE, GA, ID, IL, IN, KS KY, MA, ME, MI, MN, MS, MO, MT, NE, NC, ND, NJ, NM, NY, OH, OR, PA, RI, SC, TN, UT, VT, VA, WV, WI

Postponement of Payments to May 17, Return Due April 15
AL

Interest and Dividend Filing plus Payment Due on April 15
NH (does not tax wages but does impose a flat tax on interest and dividends)

The Worst: No Postponement of Returns or Payments After April 20
HI

From Governor Ige's website: "After careful consideration, the Hawaii State Department of Taxation has decided not to extend the Tax Year 2020 filing deadline. Taxpayers must file their returns by April 20, 2021."

Everyone, professional or amateur, who prepares tax returns does the Federal Form 1040 first, then completes the State return off of the Federal data.

By not budging on the April 20 due date Hawaii is forcing State filers to complete the calculations on the Federal return before they have to in order to determine the payment owed to Hawaii in April. And if they haven't finished by April 20th, to be safe they probably will significantly overpay Hawaii when they file the Hawaii extension and plan to get the refund later in the year.

Well, Hawaii hasn't relaxed its quarantine requirements even if inbound travelers have been vaccinated, so its inflexibility toward tax deadlines is not surprising.

That's the Aloha spirit!

Related (3/10/21): Hawaii Senate passes what’s poised to be the nation’s highest income tax. Someone has to pay for all the empty hotels.