My understanding is that while 401K distributions are generally taxable in Hawaii, there is an exclusion for the amount of any company funded matching contribution made to the plan. Hawaii doesn’t tax pension distributions where the pension was funded entirely by company contributions - and in TruboTax, I’m prompted the enter the “exclusion amount” for each 401K distribution I’m taking. This is the first year I’m taking 401K distributions. I can find language in Hawaii tax dept. on-line documents referring to this - but I can’t find the “formula” mentioned for determining the exclusion amount. For each of my previous 401K plans, my employer offered a 6% match while I contributed 8%. The examples I find seem to indicate that — for example — if I contributed $800/month to a 401K ($9600/yr) and the employee match was $600/month ($7200) — and I began to withdraw $30,000 a year from the 401K, my exclusion would be $7,200/$30,000 — or 24% — but I have no idea if this is the correct way to calculate the exclusion. TurboTax offers no guidance.
