Hawaii Qualified Tuition Programs (QTPs) are educational savings accounts that allow individuals to save for qualified education expenses on a tax-advantaged basis. However, Hawaii does not conform to the federal provision that allows up to $10,000 per year in distributions for elementary and secondary school expenses to be treated as qualified expenses. Therefore, distributions used for elementary and secondary school expenses are taxable in Hawaii and must be reported on line i of Form N-11.
Key Features of Hawaii QTPs
- Qualified Expenses: Hawaii follows the federal treatment of Qualified Tuition Program (QTP) distributions except that it does not adopt the federal provision treating distributions used for elementary and secondary school expenses as qualified expenses.
- Taxable Distributions: Distributions from a Qualified Tuition Program (QTP) used for elementary and secondary school expenses must be reported as item (i) under "Other Hawaii Additions to Federal AGI." Include the amount on the Other Hawaii Additions to Federal AGI worksheet and carry the total to the appropriate additions line on Form N-11 or Form N-15, as instructed.
- Conformity with Federal Law: Hawaii generally conforms to the federal tax treatment of Qualified Tuition Programs, except that it does not conform to the federal provision allowing tax-free Qualified Tuition Program distributions for elementary and secondary school expenses.
Source:
Form N-11
Form N-15
Disclaimer: Always verify details with the current year’s Federal or State Department of Revenue Forms and Instructions. For complex situations, consult a CPA or tax attorney.