In this review we discuss the multifaceted problem of spin transport in hydrogenated graphene from a theoretical perspective. The current experimental findings suggest that hydrogenation can either increase or decrease spin lifetimes, which calls for clarification. We first discuss the spin–orbit coupling induced by local re-hybridization and C–H defect formation together with the formation of a local magnetic moment. First-principles calculations of hydrogenated graphene unravel the strong interplay of spin–orbit and exchange couplings. The concept of magnetic scattering resonances, recently introduced by Kochan et al (2014 Phys. Rev. Lett. 112 116602) is revisited by describing the local magnetism through the self-consistent Hubbard model in the mean field approximation in the dilute limit, while spin relaxation lengths and transport times are computed using an efficient real space order N wavepacket propagation method. Typical spin lifetimes on the order of 1 ns are obtained for 1 ppm of hydrogen impurities (corresponding to a transport time of about 50 ps), and the scaling of spin lifetimes with impurity density is described by the Elliott–Yafet mechanism. This reinforces the statement that local defect-induced magnetism can be at the origin of the substantial spin polarization loss in the clean graphene limit.