N-362: Pass-Through Entity Tax Credit (2025)
Hawaii · Hawaii DoTax · Used for tax years 2025
Hawaii Form N-362 is used to calculate and claim the nonrefundable pass-through entity tax credit. It reports credits from electing pass-through entities, prior-year unused credits, the credit applied for the current year, and any unused credit carried forward.
Who files this form
Use Form N-362 to figure and claim Hawaii’s pass-through entity (PTE) tax credit if you are a qualified member of an electing PTE that pays Hawaii income tax at the entity level.
A qualified member is an individual, trust, or estate that is a member of the electing PTE. Members include S corporation shareholders, partners, and members of LLCs treated as partnerships or S corporations for federal income tax purposes.
The form’s instructions require Form N-362 and Schedule CR to be filed every year, even when no carryover credit is applied to the current year’s tax liability.
What you'll need
To claim the credit, complete and attach these documents to your Hawaii income tax return:
- Form N-362.
- Schedule CR, for returns that require it.
- A completed Schedule K-1.
You will also need:
- Each electing PTE’s name, federal employer identification number (FEIN), and credit amount for the tax year.
- Your unused PTE credit carryover from the prior year.
- Your adjusted tax liability from Form N-11, line 34; Form N-15, line 51; or Form N-40, Schedule G, line 3.
- Amounts for other nonrefundable credits listed in the Credit Worksheet, if you claim any of them.
How to file
Attach Form N-362 to Schedule CR and include the required credit documents with your Hawaii income tax return. The supplied text does not give a mailing address or e-filing directions.
- In Part I, enter each PTE’s name, FEIN, and credit amount. Add the credit amounts on line 2 and enter that total in Schedule CR, Column (b), on the appropriate credit line.
- In Part II, enter your prior-year carryover on line 3. Also enter it on Schedule CR, line 32, Column (a). Add lines 2 and 3 on line 4.
- Enter your adjusted tax liability on line 5. Use the Credit Worksheet for applicable other nonrefundable credits and enter the result on line 6. If none apply, enter zero.
- Subtract line 6 from line 5 on line 7. Enter zero if the result is zero or less.
- On line 8, enter the smaller of line 4 or line 7, rounded to the nearest dollar. Enter this credit on Schedule CR, line 32, Column (c).
- Subtract line 8 from line 4 to find the unused credit on line 9. If it is more than zero, enter it in Schedule CR, Column (d), on the appropriate credit line.
Form N-40 filers must also enter each beneficiary’s distributive share on Form N-40, Schedule K-1, line 9d.
Common mistakes
- Skipping the annual carryover filing. Form N-362 and Schedule CR must be filed every year, even if no carryover credit is applied that year.
- Missing the taxpayer or spouse checkbox. If you file jointly, you must check “T” for taxpayer or “S” for spouse to show whose credit each entry is.
- Not flagging extra forms. If you need more space, use additional Forms N-362 and check the box at the top of the form.
- Applying the PTE credit before certain other credits. The instructions require certain other nonrefundable credits to reduce your tax liability first.
- Overlooking the taxable-income addition. For taxable years beginning after December 31, 2024, a qualified member claiming the credit must add their share of taxes paid by the electing PTE to their taxable income.
Questions people ask
How much credit can I claim?
A qualified member may claim a credit equal to their share of the tax paid by the electing PTE. The amount applied for the year is limited to the remaining tax liability calculated on Form N-362.
Is the credit refundable?
No. It is a nonrefundable income tax credit. Unused credit may be carried forward and used against income tax liability in later years until exhausted.
Do I need to file the form if I am not using my carryover this year?
Yes. The instructions say Form N-362 and Schedule CR must be filed every year, whether or not any carryover is applied to the current year’s tax liability.
What changed for the 2025 tax year?
For taxable years beginning after December 31, 2024, Act 58 requires qualified members claiming the credit to add their share of taxes paid by the electing PTE to their taxable income.
What if I have more PTE entries than the form has room for?
Use additional Forms N-362 to provide the required information and check the additional-forms box at the top of the form.