In recent months, federal and Hawaii legislators have enacted new tax changes that could affect you when filing your tax return this year. This brief summary will acquaint you with some of the changes that might affect you this filing season.

FEDERAL

» Changes to the first-time homebuyer credit: Most taxpayers are aware of the requirements to qualify for this credit and the new credit for long-term residents, but many might not know how to claim it on their tax returns. The IRS has updated Form 5405, and there are new substantiation requirements to claim the credits. In general, you must attach a settlement statement to Form 5405. There are extra substantiation requirements for longtime residents and those taxpayers who entered into a binding contract to purchase the home before April 30, 2010.

» Limit on exclusion of gain on sale of main home: You can no longer exclude the portion of the gain attributed to periods after 2008 when the property was not being used as a main home (certain exceptions apply). To calculate the portion of the gain that must be included in income, you must multiply the total gain by the ratio of post-2008 nonqualified use to the total period of ownership.

» New tax break for contributions to Haiti earthquake relief: Cash contributions made after Jan. 11, 2010, and before March 1, 2010, to qualifying charities providing quake relief in Haiti can be deducted on your 2009 tax return, meaning you can receive an immediate tax benefit from your contribution. The general rules concerning tax deductions for charitable donations still apply.

» New sales tax deduction for motor vehicle taxes: Taxpayers who purchased a new motor vehicle after Feb. 16, 2009, may deduct any state or local sales or excise taxes on up to $49,500 of the purchase price (before taxes), regardless of whether they itemize deductions. The deduction, however, is phased out for high-income individuals.

» Five-Year Net Operating Loss (NOL) Carry-back: This carry-back is no longer restricted to qualified small businesses; all taxpayers may now elect to carry back a 2008 or 2009 net operating loss for up to five years (certain limitations apply). In general, this election is available for any single tax year beginning or ending in 2008 or 2009.

HAWAII

» Increased income tax for high-income individuals: Three new tax brackets apply to high-income individuals (those with incomes in excess of $150,000; $300,000 for married couples filing jointly) for the tax years from 2009 through 2015. The highest effective tax rate for individuals has been raised to 11 percent from 8.25 percent.

» New limitations on investment tax credit: For investments made in Qualified High Technology Businesses (QHTB) on or after May 1, 2009, the credit is limited to 80 percent of the taxpayer's tax liability. Furthermore, carryovers of the investment tax credits related to these investments are disallowed for the 2009 and 2010 tax years. These changes are reflected on the new Form N-318.

» Election to claim renewable energy technologies income tax credit as a refundable credit: In general, this election applies to solar energy systems placed in service on or after July 1, 2009, and requires the taxpayer to reduce the eligible credit by 30 percent.

» Acceleration of General Excise Tax (GET) tax filing deadline for period ended after Dec. 31, 2009: New legislation requires that the GET tax must be filed on the 20th day of the month following the end of the reporting period.