Withholding Tax – For Employers

Use Form BB-1 to request a withholding (WH) account number. You may also add a withholding account on Hawaii Tax Online if you already have a login.

There is no fee to open a withholding account.

Absolutely! All taxpayers are encouraged to e-file or e-pay to ensure that transactions are posted quickly and accurately.

Yes, issue employees Form W-2 or HW-2 by January 31 and submit a copy of the Form W-2 or HW-2 information to DOTAX by February 28 using Form HW-3.

The forms are essentially the same. Either can be issued to your employees. DOTAX accepts the IRS Form W-2 or our Form HW-2.

Each withholding taxpayer has two tax numbers:

• WH-###-###-####-01 is the withholding periodic account.
• WH-###-###-####-01R is the withholding annual/reconciliation account.

The account is generally referred to without the “R” at the end. The account with the “R” at the end is used to reconcile your withholding accounts annually. [NOTE: Taxpayers who open a withholding account after January 1, 2020 will only have one tax number. No “R” account will be assigned.]

Yes. Any payment of wages to employees may be subject to withholding tax. Please refer to Booklet A, Employer’s Tax Guide (Revision 2017) for more information on withholding requirements.

E-file your returns using Hawaii Tax Online or for uploading bulk files, you may set up a secure file transmission (FSET). For assistance with setting up FSET, please complete and submit Form EF-2, Hawaii Bulk Filing System Registration.

For taxable periods beginning on or after January 1, 2020, taxpayers whose withholding tax liability exceeds $40,000 annually must e-file. Failure to comply with this requirement will result in a penalty of two percent (2%) of the amount of tax required to be shown on the return. Tax Announcement 2019-11: Mandatory electronic filing of withholding tax returns for employers whose annual liability exceeds $40,000 AMENDED

If you make a mistake on your return, you can file an amended return.

No. All withholding taxes are filed on a set quarterly (calendar year) schedule.

Submit Form HW-26 to request approval of an extension for the filing of Form HW-3 and its associated Form HW-2s. Form HW-26 is only an extension of time to file, not an extension of time to pay. You must indicate a reason for the extension request. Your request will only be granted for a period of 60 days or less and is subject to approval.

Penalty and interest will be assessed.

You can use Hawaii Tax Online to make a payment (1) from your checking or saving account (free) or (2) using a credit or debit card payment (fees apply).

Taxpayers with withholding tax liabilities over $40,000 must e-pay. Failure to meet this requirement will result in the assessment of a two percent (2%) penalty of the amount of tax required to be shown on the return.

Payment frequency depends on your withholding tax liability:

Penalty and interest will be assessed.

You may use Form HW-14 to reconcile your tax due and payments quarterly.

Both returns and payments are required. If you do not file a return, your payment may not be posted to your account properly. A return is needed to completely post your payment to your withholding account.

If you do not receive a Form HW-4 from an employee, you must withhold the tax as if the employee is single and claiming zero exemptions.

Please send a copy of the Form HW-4 for that employee to the Tax Assessor in the district office where you file your withholding tax returns. For more information relating to withholding allowances see Tax Information Release No. 95- 4.

Yes.

A: Yes. If an employer fails, neglects, or refuses to deduct and withhold form the wages paid to an employee, the employer will be liable to pay the amount of tax to the State.