HAR §18-235-1.10. Aliens

(a) “Alien” means an individual who is not a United States citizen. (b) An alien is a resident of Hawaii if the alien has permanent resident alien status (green card) and is domiciled in Hawaii, or resides in Hawaii for other than a temporary or transitory purpose. Thus, like all other individuals, the status of an alien as a resident or nonresident for Hawaii income tax purposes is determined by all of the factual circumstances. (c) Hawaii has not adopted the federal provisions of Internal Revenue Code (IRC) section 7701(b)(with respect to the definition of resident alien and nonresident alien), and therefore, section 7701(b) does not control for Hawaii income tax purposes. In addition, tax treaties between the United States and foreign countries do not apply to sub-nation states’ taxing authority and therefore do not control for Hawaii income tax purposes. (d) In certain situations, a taxpayer may be considered a nonresident alien for federal income tax purposes and a resident for Hawaii income tax purposes. In these situations, the special rules applicable to individuals who are considered nonresident aliens for federal income tax purposes will apply when the individual files a Hawaii resident income tax return. Example 1: N, a Hawaii resident, married O, a citizen of Australia, while both were attending college in Hawaii. Upon their graduation from college, they both found employment in Hawaii. After their marriage, O filed the required documents and became a permanent resident alien. Conclusion: O is deemed to be a resident of Hawaii. O is domiciled in Hawaii and became a permanent resident alien upon her marriage to N. Example 2: P is a Japanese national who is domiciled in Japan. In 1995, P moved to Hawaii to manage a Japanese company’s U.S. business operations. P was admitted by the United States Immigration and Naturalization Service as a nonimmigrant alien. P’s authorized stay can be extended periodically. During 1995, P was physically present in Hawaii for more than 200 days during the taxable year. Conclusion: P is deemed to be a resident of Hawaii. Although P is in Hawaii as a nonimmigrant alien, and is domiciled in Japan, P is in Hawaii for other than a temporary or transitory purpose. HRS §235-1 §18-235-1.11 INCOME TAX LAW 235- 12 (Unofficial Compilation as of 12/31/2025) Example 3: Q accepted a tenure track position at the University of Hawaii, and arrived to begin employment on August 1, 1996. Although Q entered the United States on a nonimmigrant alien visa, Q intends to remain in the United States as a permanent resident alien and pursue tenure at the University of Hawaii. Conclusion: Although Q was not in Hawaii for more than 200 days in 1996, Q is in Hawaii for other than a temporary or transitory purpose. Therefore, Q should file as a part-year resident for tax year 1996 even though the 200 day test of the presumption of residency is not met. Example 4: Mr. and Mrs. R and their son are citizens of Brazil and are in Hawaii on J visas. Mr. R is a teacher and does not meet the substantial presence test under IRC section 7701(b)(3) and is, therefore, a nonresident alien for federal income tax purposes. Mr. R files a federal Form 1040-NR on which his filing status is required to be married filing a separate return. IRC section 6013(a)(1) does not allow the filing of a joint return if either spouse was a nonresident alien at any time during the taxable year. Mrs. R also works part-time in Hawaii. Mr. and Mrs. R and their son were in Hawaii for more than 200 days in 1996 and will be filing as Hawaii residents. Can Mr. and Mrs. R file a joint Hawaii resident tax return? Conclusion: Section 235-93, HRS, provides that a husband and wife, having that status for purposes of the IRC and entitled to make a joint federal return for the taxable year, may make a single return jointly of taxes under this chapter for the taxable year. Hawaii has adopted the provisions of IRC section 6013(a)(1) through section 18-235- 93(a)(2), HAR. IRC section 6013(a) (1) provides that no joint return shall be made if either the husband or the wife at any time during the taxable year is a nonresident alien. Accordingly, Mr. and Mrs. R cannot file a joint Hawaii tax return. Mr. and Mrs. R must each file separate Hawaii resident tax returns. Example 5: The facts are the same as stated in Example 4. Can Mr. R claim his son as his dependent on his Hawaii resident tax return? Conclusion: Section 235-54, HRS, provides that the number of personal exemptions an individual may claim is in part determined by ascertaining the number of personal exemptions that the individual may lawfully claim under IRC section 151. IRC section 873(b)(3), limits a nonresident alien individual to claim, under IRC section 151, a single deduction for personal exemption unless the taxpayer is a resident of a contiguous country or a national of the United States. IRC section 152(b)(3) further states that the term “dependent,” for purposes of determining personal exemptions under IRC section 151, does not include any individual who is not a citizen or national of the United States unless such individual is a resident of the United States or country contiguous to the United States. For federal income tax purposes, Mr. R cannot claim his son as a dependent since his son is not a U.S. citizen, U.S. national, resident alien or resident of a country contiguous to the United States. Accordingly, Mr. R cannot claim his son as a dependent on his Hawaii resident tax return. Example 6: The facts are the same as stated in Example 4. Can Mr. R claim the standard deduction on his Hawaii resident tax return. Conclusion: IRC section 63(c)(6), which Hawaii adopts through section 235-2.4(a), HRS, provides that a nonresident alien individual cannot claim the standard deduction. Accordingly, Mr. R cannot claim the standard deduction on his Hawaii resident tax return. Mr. R must itemize any allowable deductions. Example 7: Mr. and Mrs. S are in Hawaii on H visas. Mr. S is a college professor. Mr. S meets the federal substantial presence test but files a federal Form 1040-NR to claim the treaty benefits which exclude his wages as a professor from federal taxation for two years. Mr. and Mrs. S were in Hawaii for more than 200 days in 1996 and will be filing as Hawaii residents. Will the treaty also exclude Mr. S’s wages from Hawaii taxation? Conclusion: The provisions of income tax treaties are between the United States and the foreign country. Income tax treaties are designed to protect taxpayers from double and discriminating taxation by either treaty country, and normally do not preempt state tax laws. Accordingly, the treaty has no effect on Hawaii income tax law and Mr. S’s wages as a professor are subject to Hawaii income tax. [Eff 2/16/82; am 9/3/94; am and ren §18-235-1.10 8/28/98] (Auth: HRS §§231-3(9), 235-118) (Imp: HRS §235-2.4, 235-54, 235-93)