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INSTRUCTIONS
FORM N-152 STATE OF HAWAII — DEPARTMENT OF TAXATION
(Rev. 2023) INSTRUCTIONS FOR FORM N-152

TAX ON LUMP-SUM DISTRIBUTIONS
From Qualified Retirement Plans
(Section references are to the Internal Revenue Code.)
(Note: Reference to “spouse” is also a reference to “civil union partner.”)
Note: Any lump-sum distribution repre- Who Can Use the Form 3. U.S. Retirement Plan Bonds distrib-
senting a pension for past services should uted with the lump-sum.
not be included in the amount reportable You can use Form N-152 if you received
for Hawaii income tax purposes. Com- a qualified lump-sum distribution in 2023. 4. Any distribution made before the par-
plete Schedule J (Form N-11/N-15/N-40) To see if your distribution is a qualified ticipant had been in the plan for 5 tax
to determine the taxable portion of your lump-sum distribution, see the following years, unless it was paid because
lump-sum distribution. See the instruc- discussion. the participant died.
tions for Part I, line 2 for more information. What is a Qualified Lump-Sum Dis- 5. The current actuarial value of any an-
tribution? nuity contract included in the lump-
Important sum (the payor’s statement should
• The 5-year tax option is no longer It is the distribution or payment in one tax
show this amount, which you use only
available. The capital gain election year of a plan participant’s entire balance
to figure tax on the ordinary income
and the 10-year tax option are still from all of the employer’s qualified plans
part of the distribution).
available to those who were born of one kind (i.e., pension, profit-sharing,
before 1936. or stock bonus plans), in which the par- 6. Any distribution to a 5% owner that is
ticipant had funds. The participant’s entire subject to federal penalties under sec-
• The $5,000 exclusion for employer- balance does not include deductible vol- tion 72(m)(5)(A).
provided death benefits has been untary employee contributions or certain 7. A distribution from an IRA.
repealed for plan participants dying forfeited amounts. The participant must
after August 20, 1996. If you received have been born before 1936. 8. A distribution of the redemption pro-
death benefits from an employer as a ceeds of bonds rolled over tax free to
beneficiary of a participant who died Distributions upon death of the plan a qualified pension plan, etc., from a
after August 20, 1996, you cannot participant. If you received a qualifying qualified bond purchase plan.
take this death benefit exclusion. distribution as a beneficiary after the par-
ticipant’s death, the participant must have 9. A distribution from a qualified plan if
Nonresidents and Part-Year been born before 1936 for you to use this the participant or his or her surviv-
Residents form for that distribution. ing spouse previously received an
eligible roll over distribution from the
Public Law 104-95 prohibits any state Distributions to Alternate Payees.—If same plan (or another plan of the em-
from imposing an income tax on the re- you are the spouse or former spouse of ployer required to be combined with
tirement income of any individual who is a plan participant who was born before that plan for the lump-sum distribution
not a resident or domiciliary of that state. 1936 and you received a qualifying lump- rules), and the previous distribution
As a result, nonresidents and part-year sum distribution as an alternate payee was rolled over tax free to another
residents who received their lump-sum under a qualified domestic relations or- qualified plan or an IRA.
distribution while they were a nonresident der, you can use Form N-152 to figure the
do not need to complete Form N-152. tax on that distribution. 10. A corrective distribution of excess de-
ferrals, excess contributions, excess
However, they must complete Schedule You can use Form N-152 to make the
aggregate contributions, or excess
J (Form N-11/N-15/N-40) to determine capital gain election and use the 10-year annual additions.
the amount to include on Form N-15, line tax option to figure your tax on the distri-
16, Column A. bution. 11. A distribution from a qualified plan that
See How To Report The Distribution received a rollover after 2001 from an
General Instructions on this page. IRA (other than a conduit IRA), a gov-
ernmental section 457 plan, or a sec-
Purpose of Form Distributions That Do Not Qualify for tion 403(b) tax-sheltered annuity on
If you received a lump-sum distribution the Capital Gain Election or for the behalf of the plan participant.
from a qualified profit-sharing or retire- 10-Year Tax Option
12. A distribution from a qualified plan that
ment plan, all or part of the distribution The following distributions are not quali- received a rollover after 2001 from an-
may be taxable. You can use Form N-152 fying lump-sum distributions and do not other qualified plan on behalf of that
to figure your tax by special methods. The qualify for the capital gain election or the plan participant’s surviving spouse.
capital gain election and the 10-year tax 10-year tax option:
option are special formulas used to figure 13. A distribution from a qualified pension
1. The part of a distribution not rolled
a separate tax on a qualified lump-sum or annuity plan if any portion of the
over if the distribution is partially rolled
distribution ONLY for the year in which distribution is rolled over tax free to
over to another qualified plan or an
the distribution is received. another qualified pension or annuity
IRA.
You pay the tax only once. You do not plan or IRA.
pay the tax over the next 10 years. Once 2. Any distribution if an earlier election 14. A distribution from a tax-sheltered an-
you choose your option and figure the to use either the 5- or 10-year tax op- nuity (section 403(b) plan).
tax, it is then added to the regular tax fig- tion had been made after 1986 for the
ured on your other income. same plan participant.

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FORM N-152 INSTRUCTIONS
(REV. 2023) Page 2
How To Report the Distribution 1099-R, Box 3, or from Form N-152, line had a qualifying plan for which you are
11, on Form N-15, line 16, Column A; or the beneficiary. You also received a qual-
If you qualify to use Form N-152 attach Form N-40, line 8. ifying lump-sum distribution from your
it to Form N-11, N-15, or N-40 (estates own plan and you were born before 1936.
The entries in other boxes on Form
or trusts). The payor should have given You may make an election for each of the
1099-R may also apply in completing
you a federal Form 1099-R, Distributions distributions; one for yourself, one as the
Form N-152:
From Pensions, Annuities, Retirement or beneficiary of your father, and one as
Profit–Sharing Plans, IRAs, Insurance • Box 6, Net Unrealized Appreciation
Contracts, etc., or other statement that (NUA). See page 3 for details on the beneficiary of your mother. It does
shows the amounts to use in completing how to treat this amount. not matter if the distributions all occur in
the form. The following choices are avail- • Box 8, other, current actuarial value the same year or in different years. File
able to you: of an annuity. a separate Form N-152 for each partici-
pant’s distribution(s).
1. Capital Gain Election. If the plan If applicable, get the amount of federal An election on Form N-152, or
Note:
participant was born before 1936, and estate tax paid attributable to the taxable Form N-162 for distributions received
there is an amount shown on Form part of the lump-sum distribution from the before 1987, while you were under age
1099-R, Box 3 (capital gain), you can administrator of the deceased’s estate. 59-1/2, does not preclude any election
use Part II of this form to make the For more details, see federal Publica- you can make for distributions received
capital gain election. When you com- tion 575. after 1986.
plete Part II, you are electing to report Instructions for Form N-11 Filers
When You Can File Form N-152
the capital gain portion as a long-term • If you choose not to use any part of
capital gain. See Capital Gain Elec- Form N-152, complete Schedule J You can file Form N-152 with either an
tion on this page and Part II, line 9, (Form N-11/N-15/N-40) through line original or an amended return. For an
instructions on page 3 for details. 24. amended return, you generally must file
2. 10-Year Tax Option. If the plan par- • If you choose not to use Part III of within 3 years after the date the original
ticipant was born before 1936, you Form N-152, but you do use Part return was filed or within 2 years after the
can use Part III to figure your tax on II to make the capital gain election, date the tax was paid, whichever is later,
the lump-sum distribution. You can enter the taxable ordinary income to use any part of Form N-152.
use this option whether or not you portion on line B of the Form N-11 Capital Gain Election
make the capital gain election de- Filers Worksheet on page 4. The
If the plan participant was born before
scribed on this page. taxable ordinary income portion
1936 and the distribution includes a capi-
Where to Report. — Depending on of the distribution is determined
tal gain, you can either (1) make the capi-
which parts of Form N-152 you choose by subtracting the taxable capital
tal gain election in Part II, or (2) treat the
to use, report amounts from your 1099- gain portion from the total taxable
capital gain as ordinary income.
R either directly on your tax return (Form distribution.
Only the taxable amount of distribu-
N-15 or Form N-40) or on Form N-152. • If you choose to use Part III of Form tions resulting from pre-1974 participation
(Note: Form N-11 filers, see Instructions N-152, do not enter the taxable qualifies for capital gain treatment. The
for Form N-11 Filers on this page). ordinary income amount you use in capital gain amount should be shown
• If you choose not to use any part the tax computation on this form on on Form 1099-R, Box 3 (capital gain). If
of Form N-152, report the taxable the Form N-11 Filers Worksheet. there is an amount on Form 1099-R, Box
portion of the distribution from • If you make the capital gain election 6 (net unrealized appreciation), part of
Schedule J (Form N-11/N-15/N-40), (Form N-152, Part II), enter the it may also qualify for capital gain treat-
line 22 on Form N-15, line 16, capital gain amount from Form ment. Use the NUA Worksheet on page
Column A; or Form N-40, line 8. N-152, line 11, on line A of the Form 3 to figure the taxable capital gain part of
• If you choose not to use Part III of N-11 Filers Worksheet. NUA if you make the election to include
Form N-152, but you do use Part II to NUA in your taxable income.
make the capital gain election, report How Often You Can Use Form
You may report the ordinary income
only the taxable ordinary income N-152 portion of the distribution on Form N-15,
part of the distribution on Form After 1986, you may use Form N-152 line 16, Column A; or Form N-40, line 8;
N-15, line 16, Column A; or on Form only once for each plan participant. If or you may elect to figure the tax using
N-40, line 8. The taxable ordinary you receive more than one lump-sum dis- the 10-year tax option. The ordinary in-
income portion of the distribution tribution for the same plan participant in come portion is the amount from Form
is determined by subtracting the one tax year, you must treat all those dis- 1099-R, Box 2a, minus the amount from
taxable capital gain portion from the tributions the same way. Combine them Box 3 of that form.
total taxable distribution. on a single Form N-152. —
Net Unrealized Appreciation (NUA).
• If you choose to use Part III of Form If you make an election as a beneficiary Normally, NUA in employer securities re-
N-152, do not include on Form of a deceased participant, it does not af- ceived as part of a lump-sum distribution
N-15, line 16, Column A; or on Form fect any election you can make for quali- is not taxable until the securities are sold.
N-40, line 8, the taxable ordinary fying lump-sum distributions from your However, you can elect to include NUA in
income amount you use in the tax own plan. You can also make an elec- taxable income in the year received.
computation on this form. tion as the beneficiary for more than one The total amount to report as NUA
In addition, if you make the capital gain qualifying person. should be shown in Form 1099-R, Box
election (Form N-152, Part II), do not in- Example: Your mother and father died 6. Part of the amount in Box 6 will qualify
clude the capital gain amount from Form and each was born before 1936. Each for capital gain treatment if there is an

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FORM N-152 INSTRUCTIONS
(REV. 2023) Page 3
amount in Form 1099-R, Box 3, and you Complete Schedule J (Form N-11/N- sion (for a participant who died before
elect to include the NUA in current in- 15/N-40) If you qualify to use this form, August 21, 1996), figure the amount to
come. you will need to complete Schedule J enter on line 11 using the Death Benefit
To figure the total taxable amount sub- to determine the taxable portion of your Worksheet on this page.
ject to capital gain treatment including the distribution. If you elect to include NUA The remaining allowable death benefit
NUA, complete the NUA Worksheet on in taxable income, include the amount exclusion should be entered on line 16 if
page 3. from Box 6 of federal Form 1099-R in the you choose the 10-year tax option.
See the Specific Instructions for more amount on Schedule J (Form N-11/N- If any federal estate tax was paid on
information on line entries. 15/N-40), line 1. the lump-sum distribution, you must
Part II decrease the capital gain amount by the
Specific Instructions See Capital Gain Election on page 2 amount of estate tax applicable to it. To
Name of Recipient of Distribution before completing Part II. figure the amount, multiply the total fed-
eral estate tax paid on the lump-sum dis-
and Identifying Number. — At the top of Line 9. — Leave this line blank if your
tribution by the decimal amount from line
Form N-152, fill in the name and identify- distribution does not include a capital gain
E of the Death Benefit Worksheet. The
ing number of the recipient of the distribu- amount, or you do not make the capital
result is the portion of the federal estate
tion. gain election. Go to Part III.
tax applicable to the capital gain amount.
If you received more than one qualifying To make the capital gain election, enter Subtract that amount from the capital
distribution in 2023 for the same plan par- on line 9 the entire capital gain amount gain amount from line H of the Death
ticipant, add them and figure the tax on from Form 1099-R, Box 3. However, if Benefit Worksheet, and enter the result
the total amount. If you received qualified you elect to include NUA in your taxable on line 11. If you elected to include NUA
distributions in 2023 for more than one income, enter on line 9 the amount from in taxable income, subtract the portion of
participant, file a separate Form N-152 for line G of the NUA Worksheet on this page federal estate tax applicable to the capital
the distributions of each participant. instead of the amount from Form 1099- gain amount from the amount on line G of
If you and your spouse are filing a joint R, Box 3. On the dotted line to the left of the NUA Worksheet. Enter the result on
return and each has received a lump-sum the entry space for line 9, write “NUA” and line 11. Enter the remainder of the federal
distribution, complete and file a separate the amount from line E of the NUA Work- estate tax on line 26.
Form N-152 for each spouse’s election, sheet.
Note: If you take the death benefit exclu-
and combine the tax on Form N-11, line To make the capital gain election when
sion AND federal estate tax was paid on
27; or Form N-15, line 44. you are taking a death benefit exclu- the capital gain amount, the capital gain
If you are filing for a trust that shared the
distribution only with other trusts, figure
the tax on the total lump-sum first. The NUA Worksheet (keep for your records)
trusts then share the tax in the same pro- Do not complete if you do not make a capital gain election
portion that they shared the distribution. A. Enter the amount from Form 1099-R, Box 3 .................................. A.
If the distribution is made to more than B. Enter the amount from Form 1099-R, Box 2a ................................ B.
one beneficiary, follow the instructions C. Divide line A by line B and enter the result as a decimal (rounded
under Multiple Recipients of a Lump- to at least three places) .................................................................. C.
Sum Distribution on page 4. D. Enter the amount from Form 1099-R, Box 6 .................................. D.
E. Multiply line C by line D and enter the result (NUA subject to
Part I capital gain treatment) .................................................................... E.
Line 2.— Income received as a pen-F. Subtract line E from line D (NUA that is ordinary income) .............. F.
sion for past services is not subject to G. Add lines A and E (total part of distribution that can receive capital
Hawaii income tax. Only that portion of a gain treatment). Enter the total here and on Form N-152, Part II,
retirement or profit-sharing plan that is re- line 9 ...............................................................................................G.
ceived because of your retirement or the On the dotted line next to line 9, write “NUA” and the amount from
death of the employee and is paid for by line E above.
the employer is considered a pension for
this purpose. If you did not contribute to Death Benefit Worksheet (keep for your records)
the cost of the plan, i.e., your employer A. Enter the capital gain amount from Form 1099-R, Box 3. If you
paid the entire cost, check “Yes” on line elected to include NUA in taxable income, enter the amount from
line G of the NUA Worksheet.......................................................... A.
2. No part of the distribution is subject to
B. Enter the factor from Schedule J, line 16. ...................................... B.
Hawaii income tax. Do not complete the
rest of the form. If you paid part of the cost C. Multiply line A by line B. ................................................................. C.
of the plan and your employer paid part of D. Enter the amount from Schedule J, line 20. ................................... D.
the cost, that portion considered to have E. Divide line C by line D and enter the result as a decimal (rounded
to at least three places) .................................................................. E.
been paid by your employer is a pension.
F. Enter your share of the death benefit exclusion* ............................ F.
The portion that you are considered to
have paid is not a pension and is subject G. Multiply line F by line E ................................................................... G.
to Hawaii income tax. If you paid part of H. Subtract line G from line C. Enter the result here and on Form
N-152, Part II, line 11. Write “DBE” in the amount space for line 9. H.
the cost of your plan, check “No” on line * Applies only for participants who died before August 21, 1996. If there are multiple recipients
2. You will need to complete Schedule J of the distribution, the $5,000 maximum death benefit exclusion must be allocated among the
(Form N-11/N-15/N-40) to determine the recipients in the same proportion that they share the distribution.
taxable portion of your distribution.

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FORM N-152 INSTRUCTIONS
(REV. 2023) Page 4
amount must be reduced by both proce- Enter the death benefit exclusion on bution shown in Box 9a. Enter this
dures discussed above to figure the cor- line 16. But see the instructions for line 9, amount on Form N-152, line 14.
rect entry for line 11. if you made a capital gain election. (b) If you make the capital gain election,
Line 11. — Multiply the amount on line 9 Line 26. — A beneficiary who receives a subtract the amount on line 11 from
by the factor on line 10. Enter this amount lump-sum distribution because of a plan the amount on Schedule J (Form N-
here. Form N-11 filers, enter this amount participant’s death must reduce the tax- 11/N-15/N-40), line 20. Divide the re-
on the Form N-11 Filers Worksheet, line able part of the distribution by any federal sult by your percentage of distribution
A, on page 4. estate tax paid on the lump-sum distribu- shown in Box 9a. Enter the result on
Lines 12a through 12k. — Before com- tion. The reduction is made by entering Form N-152, line 14.
pleting lines 12a through 12k, complete on line 26 the federal estate tax attribut- (c) Divide the amount shown in Box 8 by
Part III, lines 14 through 17, even if you able to the lump-sum distribution. Also, the percentage shown in Box 8. En-
do not elect to use Part III. see the instructions for line 9 if you made ter the result on Form N-152, line 18.
a capital gain election. Step 3. — Use this step only if you
Part III Part III, Lines 32 and 35. — Use the elect to include NUA in your taxable in-
Line 14.— Enter the amount from Sched- TAX RATE SCHEDULE FOR 10-YEAR come. (Box numbers used below are all
ule J (Form N-11/N-15/N-40), line 20. If TAX OPTION, which is printed on page 2 from Form 1099-R.)
you have elected to include NUA in your of Form N-152 to complete lines 32 and (a) If you do not make the capital gain
taxable income, write “NUA” on the dot- 35. election, add the amount on Sched-
ted line to the left of line 14. Multiple Recipients of a Lump-Sum ule J (Form N-11/N-15/N-40), line 20
Line 15.— If you made the capital gain Distribution. — If you shared a lump- to the amount shown in Box 6. Divide
election, subtract line 11 from line 14. sum distribution from a qualified retire- the result by your percentage of dis-
ment plan when not all recipients were tribution shown in Box 9a. Enter the
Line 16. — If you received the distribution result on Form N-152, line 14.
trusts (a percentage will be shown in
because of the plan participant’s death,
Boxes 8 and/or 9a, Form 1099-R), figure (b) If you make the capital gain election,
and the participant died before August
your tax on Form N-152 as follows: subtract the amount on line 11 from
21, 1996, you may be able to exclude
up to $5,000 of the lump-sum from your Step 1. — Complete Parts I and II of the amount on Schedule J (Form
gross income. If you are filing for a trust Form N-152. N-11/N-15/N-40), line 20. Add to the
and the trust shared the lump-sum with Step 2. — Use this step only if you do result the amount from line F of your
other trusts, it will share the exclusion not elect to include NUA in your taxable NUA Worksheet. Then divide the to-
tal by your percentage of distribution
in the same proportion as it shared the income or if you do not have NUA. If you
shown in Box 9a. Enter the result on
distribution. This exclusion applies to the elect to include NUA in taxable income,
beneficiaries or estates of common-law skip Step 2 and go to Step 3. (Box num- Form N-152, line 14.
employees, self-employed individuals, bers used below are all from Form 1099- (c) Divide the amount shown in Box 8 by
and shareholder-employees who owned R) the percentage shown in Box 8. En-
more than 2% of the stock of an S cor- (a) If you do not make the capital gain ter the result on Form N-152, line 18.
poration. Federal Publication 939 gives election, divide the amount shown on Step 4. — Complete Form N-152, Part
more information about the death benefit Schedule J (Form N-11/N-15/N-40), III, through line 36.
exclusion. line 20 by your percentage of distri- Step 5. — Complete the Multiple Re-
cipient Distribution Worksheet below
to figure the entry for line 37.

Form N-11 Filers Worksheet (keep for your records)
A. Enter the amount from Form N-152, line 11. .................................. A.
B. Enter the taxable ordinary income portion of the distribution ......... B.
C. Add lines A and B. ..........................................................................C.
D. Enter the sum of the amounts, if any, from federal Form 1040,
lines 4b and 5b, which are attributable to any taxable income
which could have been reported on federal Form 4972. ................ D.
E. Compare lines C and D. If line C is larger than line D, enter the
Hawaii Additional Taxable amount (line C minus line D) here and
on your Hawaii Additions Worksheet, line j, on page 31 of the
Form N-11 Instructions. .................................................................. E.
F. Compare lines C and D. If line C is smaller than line D, enter the
Hawaii Nontaxable amount (line D minus line C) here and on your
Hawaii Subtractions Worksheet, line n, on page 31 of the
Form N-11 Instructions. .................................................................. F.
Multiple Recipient Worksheet (keep for your records)
A. Enter your percentage of distribution from Form 1099-R, Box 9a .. A.
B. Form N-152, line 33 minus line 36 ................................................. B.
C. Multiply line A by the amount on line B. Enter the amount here
and on Form N-152, line 37. Also, write “MRD” on the dotted line
next to the entry space. This amount is in place of the amounts
originally obtained by completing Step 4. ....................................... C.

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