Aloha,

The problem is the non-deductibility of the expenses.

Per Hawaii Dept of Taxation 

https://tax.hawaii.gov/upd_4txpayr/

Adoption of Federal Tax Provisions

We are unable to provide any definitive guidance on conforming to the federal provisions until the Legislature successfully passes legislation. This would include:

• Provisions for the exemption of the first $10,200 of unemployment compensation
• Allowing PPP expenditures to be deductible when the PPP loan was forgiven

Any bill passed by the Hawaii State Legislature automatically becomes law by July 6th with or without the Governor’s signature, provided the Governor does not veto the bill.