What if I had income from tax-exempt municipal bonds or tax- free bond mutual funds?
Interest from municipal bonds or bond funds, although exempt from federal income tax, is not exempt from Hawaii income tax (unless a Hawaii state or county agency issued the bonds). If you received this kind of income, you need to make an adjustment on the appropriate line of Form N-11. • What if I had income from U.S. Savings Bonds or Treasury securities? Interest from federal securities (for example, U.S. Savings Bonds, Treasury bills, or Treasury notes) is not exempt from federal income tax, but is exempt from Hawaii income tax. If you received this kind of income, you need to make a subtraction on the appropriate line of Form N-11. However, if you cashed in Series E savings bonds to pay for higher education tuition and fees, you probably filed federal Form 8815 because the federal government does not tax all of the interest. If that happened, you can only subtract the amount reported as taxable on your federal return. • What if I itemized deductions on my 1994 Hawaii return and rec
