Income tax; authorize a credit for contributions by certain taxpayers to certain charitable organizations.

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To: Ways and Means
MISSISSIPPI LEGISLATURE REGULAR SESSION 2026

By: Representative Bell (21st)

HOUSE BILL NO. 1945
(As Passed the House)

AN ACT TO AMEND SECTION 27-7-22.39, MISSISSIPPI CODE OF 1972, 1
WHICH AUTHORIZES INCOME TAX CREDITS AND AD VALOREM TAX CREDITS FOR 2
VOLUNTARY CASH CONTRIBUTIONS BY INDIVIDUAL TAXPAYERS TO QUALIFYING 3
CHARITABLE ORGANIZATIONS AND QUALIFYING FOSTER CARE CHARITABLE 4
ORGANIZATIONS, TO AUTHORIZE INCOME TAX CREDITS FOR VOLUNTARY CASH 5
CONTRIBUTIONS BY CERTAIN OTHER TAXPAYERS TO QUALIFYING CHARITABLE 6
ORGANIZATIONS; AND FOR RELATED PURPOSES. 7
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI: 8
SECTION 1. Section 27-7-22.39, Mississippi Code of 1972, is 9
amended as follows: 10
27-7-22.39. (1) As used in this section: 11
(a) "Low-income residents" means persons whose 12
household income is less than one hundred fifty percent (150%) of 13
the federal poverty level. 14
(b) "Qualifying charitable organization" means a 15
charitable organization that is exempt from federal income 16
taxation under Section 501(c)(3) of the Internal Revenue Code or 17
is a designated community action agency that receives community 18
services block grant program monies pursuant to 42 USC 9901. The 19
organization must spend at least fifty percent (50%) of its budget 20
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on services to residents of this state who receive temporary 21
assistance for needy families benefits or low-income residents of 22
this state and their households or to children who have a chronic 23
illness or physical, intellectual, developmental or emotional 24
disability who are residents of this state. A charitable 25
organization that is exempt from federal income tax under Section 26
501(c)(3) of the Internal Revenue Code and that meets all other 27
requirements of this paragraph except that it does not spend at 28
least fifty percent (50%) of its overall budget in Mississippi may 29
be a qualifying charitable organization if it spends at least 30
fifty percent (50%) of its Mississippi budget on services to 31
qualified individuals in Mississippi and it certifies to the 32
department that one hundred percent (100%) of the voluntary cash 33
contributions from the taxpayer will be spent on services to 34
qualified individuals in Mississippi. Taxpayers choosing to make 35
donations through an umbrella charitable organization that 36
collects donations on behalf of member charities shall designate 37
that the donation be directed to a member charitable organization 38
that would qualify under this section on a stand-alone basis. 39
Qualifying charitable organization does not include any entity 40
that provides, pays for or provides coverage of abortions or that 41
financially supports any other entity that provides, pays for or 42
provides coverage of abortions. 43
(c) "Qualifying foster care charitable organization" 44
means a qualifying charitable organization that each operating 45
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year provides services to at least one hundred (100) qualified 46
individuals in this state and spends at least fifty percent (50%) 47
of its budget on services to qualified individuals in this state. 48
A charitable organization that is exempt from federal income tax 49
under Section 501(c)(3) of the Internal Revenue Code and that 50
meets all other requirements of this paragraph except that it does 51
not spend at least fifty percent (50%) of its overall budget in 52
Mississippi may be a qualifying foster care charitable 53
organization if it spends at least fifty percent (50%) of its 54
Mississippi budget on services to qualified individuals in 55
Mississippi and it certifies to the department that one hundred 56
percent (100%) of the voluntary cash contributions from the 57
taxpayer will be spent on services to qualified individuals in 58
Mississippi. For the purposes of this paragraph, "qualified 59
individual" means a child in a foster care placement program 60
established by the Department of Child Protection Services, a 61
child placed under the Safe Families for Children model, or a 62
child at significant risk of entering a foster care placement 63
program established by the Department of Child Protection 64
Services. 65
(d) "Services" means: 66
(i) Cash assistance, medical care, child care, 67
food, clothing, shelter, and job-placement services or any other 68
assistance that is reasonably necessary to meet immediate basic 69
needs and that is provided and used in this state; 70
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(ii) Job-training or education services or funding 71
for parents, foster parents or guardians; or 72
(iii) Job-training or education services or 73
funding provided as part of a foster care independent living 74
program. 75
(2) (a) Except as provided in subsections (3) and (4) of 76
this section, a credit is allowed against the taxes imposed by 77
this chapter for voluntary cash contributions by the taxpayer 78
during the taxable year to a qualifying charitable organization, 79
other than a qualifying foster care charitable organization, not 80
to exceed: 81
(i) Through calendar year 2022, the lesser of Four 82
Hundred Dollars ($400.00) or the amount of the contribution in any 83
taxable year for a single individual or a head of household; and 84
for calendar year 2023 and each calendar year thereafter, the 85
lesser of One Thousand Two Hundred Dollars ($1,200.00) or the 86
amount of the contribution in any taxable year for a single 87
individual or a head of household. 88
(ii) Through calendar year 2022, the lesser of 89
Eight Hundred Dollars ($800.00) or the amount of the contribution 90
in any taxable year for a married couple filing a joint return; 91
and for calendar year 2023 and each calendar year thereafter, the 92
lesser of Two Thousand Four Hundred Dollars ($2,400.00) or the 93
amount of the contribution in any taxable year for a married 94
couple filing a joint return. 95
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(b) From and after January 1, 2023, a credit is also 96
allowed against ad valorem taxes assessed and levied on real 97
property for voluntary cash contributions made by the individual 98
taxpayer during the taxable year to a qualifying charitable 99
organization, other than a qualifying foster care charitable 100
organization. The amount of credit that may be utilized by a 101
taxpayer in a taxable year shall be limited to an amount not to 102
exceed fifty percent (50%) of the total tax liability of the 103
taxpayer for ad valorem taxes assessed and levied on real 104
property. Any tax credit claimed under this paragraph but not 105
used in any taxable year may be carried forward for five (5) 106
consecutive years from the close of the tax year in which the 107
credits were earned. 108
(3) (a) A separate credit is allowed against the taxes 109
imposed by this chapter for voluntary cash contributions during 110
the taxable year to a qualifying foster care charitable 111
organization. A contribution to a qualifying foster care 112
charitable organization does not qualify for, and shall not be 113
included in, any credit amount under subsection (2) of this 114
section. If the voluntary cash contribution by the taxpayer is to 115
a qualifying foster care charitable organization, the credit shall 116
not exceed: 117
(i) Through calendar year 2022, the lesser of Five 118
Hundred Dollars ($500.00) or the amount of the contribution in any 119
taxable year for a single individual or a head of household; and 120
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for calendar year 2023 and each calendar year thereafter, the 121
lesser of One Thousand Five Hundred Dollars ($1,500.00) or the 122
amount of the contribution in any taxable year for a single 123
individual or a head of household. 124
(ii) Through calendar year 2022, the lesser of One 125
Thousand Dollars ($1,000.00) or the amount of the contribution in 126
any taxable year for a married couple filing a joint return; and 127
for calendar year 2023 and each calendar year thereafter, the 128
lesser of Three Thousand Dollars ($3,000.00) or the amount of the 129
contribution in any taxable year for a married couple filing a 130
joint return. 131
(b) From and after January 1, 2023, a credit is also 132
allowed against ad valorem taxes assessed and levied on real 133
property for voluntary cash contributions made by the individual 134
taxpayer during the taxable year to a qualifying foster care 135
charitable organization. The amount of credit that may be 136
utilized by a taxpayer in a taxable year shall be limited to an 137
amount not to exceed fifty percent (50%) of the total tax 138
liability of the taxpayer for ad valorem taxes assessed and levied 139
on real property. Any tax credit claimed under this paragraph but 140
not used in any taxable year may be carried forward for five (5) 141
consecutive years from the close of the tax year in which the 142
credits were earned. 143
(4) Subsections (2) and (3) of this section provide separate 144
credits against taxes imposed by this chapter depending on the 145
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recipients of the contributions. A taxpayer, including a married 146
couple filing a joint return, in the same taxable year, may either 147
or both: 148
(a) Contribute to a qualifying charitable organization, 149
other than a qualifying foster care charitable organization, and 150
claim a credit under subsection (2) of this section. 151
(b) Contribute to a qualifying foster care charitable 152
organization and claim a credit under subsection (3) of this 153
section. 154
(5) A husband and wife who file separate returns for a 155
taxable year in which they could have filed a joint return may 156
each claim only one-half (1/2) of the tax credit that would have 157
been allowed for a joint return. 158
(6) (a) The tax credit authorized in this subsection shall 159
be available only to a taxpayer who is a business enterprise 160
engaged in commercial, industrial or professional activities and 161
operating as a corporation, limited liability company, partnership 162
or sole proprietorship. From and after January 1, 2026, a credit 163
is allowed against the taxes imposed by this chapter for voluntary 164
cash contributions made by a taxpayer during the taxable year to a 165
qualifying charitable organization, other than a qualifying foster 166
care charitable organization. The amount of the credit shall not 167
exceed the lesser of Two Thousand Four Hundred Dollars ($2,400.00) 168
or the amount of the contribution made by the taxpayer in the 169
taxable year. A contribution to a qualifying charitable 170
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organization for which a credit is claimed under this subsection 171
does not qualify for, and shall not be included in, any credit 172
that may be claimed under subsection (2) and/or subsection (3) of 173
this section. 174
(b) Tax credits authorized by this subsection that are 175
earned by a partnership, limited liability company, S corporation 176
or other similar pass-through entity, shall be allocated among all 177
partners, members or shareholders, respectively, either in 178
proportion to their ownership interest in such entity or as the 179
partners, members or shareholders mutually agree as provided in an 180
executed document. 181
( * * *7) Except as otherwise provided in subsections (2) 182
and (3) of this section, if the allowable tax credit exceeds the 183
taxes otherwise due under this chapter on the claimant's income, 184
or if there are no taxes due under this chapter, the taxpayer may 185
carry forward the amount of the claim not used to offset the taxes 186
under this chapter for not more than five (5) consecutive taxable 187
years' income tax liability. 188
( * * *8) The credit allowed by this section is in lieu of a 189
deduction pursuant to Section 170 of the Internal Revenue Code and 190
taken for state tax purposes. 191
( * * *9) Taxpayers taking a credit authorized by this 192
section shall provide the name of the qualifying charitable 193
organization and the amount of the contribution to the department 194
on forms provided by the department. 195
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( * * *10) A qualifying charitable organization shall 196
provide the department with a written certification that it meets 197
all criteria to be considered a qualifying charitable 198
organization. The organization shall also notify the department 199
of any changes that may affect the qualifications under this 200
section. 201
( * * *11) The charitable organization's written 202
certification must be signed by an officer of the organization 203
under penalty of perjury. The written certification shall include 204
the following: 205
(a) Verification of the organization's status under 206
Section 501(c)(3) of the Internal Revenue Code or verification 207
that the organization is a designated community action agency that 208
receives community services block grant program monies pursuant to 209
42 USC 9901. 210
(b) Financial data indicating the organization's budget 211
for the organization's prior operating year and the amount of that 212
budget spent on services to residents of this state who either: 213
(i) Receive temporary assistance for needy 214
families benefits; 215
(ii) Are low-income residents of this state; 216
(iii) Are children who have a chronic illness or 217
physical, intellectual, developmental or emotional disability; or 218
(iv) Are children in a foster care placement 219
program established by the Department of Child Protection 220
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Services, children placed under the Safe Families for Children 221
model or children at significant risk of entering a foster care 222
placement program established by the Department of Child 223
Protection Services. 224
(c) A statement that the organization plans to continue 225
spending at least fifty percent (50%) of its budget on services to 226
residents of this state who receive temporary assistance for needy 227
families benefits, who are low-income residents of this state, who 228
are children who have a chronic illness or physical, intellectual, 229
developmental or emotional disability or who are children in a 230
foster care placement program established by the Department of 231
Child Protection Services, children placed under the Safe Families 232
for Children model or children at significant risk of entering a 233
foster care placement program established by the Department of 234
Child Protection Services. A charitable organization that is 235
exempt from federal income tax under Section 501(c)(3) of the 236
Internal Revenue Code and that meets all other requirements for a 237
qualifying charitable organization or qualifying foster care 238
charitable organization except that it does not spend at least 239
fifty percent (50%) of its overall budget in Mississippi shall 240
submit a statement that it spends at least fifty percent (50%) of 241
its Mississippi budget on services to qualified individuals in 242
Mississippi and that one hundred percent (100%) of the voluntary 243
cash contributions it receives from Mississippi taxpayers will be 244
spent on services to qualified individuals in Mississippi. 245
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(d) In the case of a foster care charitable 246
organization, a statement that each operating year it provides 247
services to at least one hundred (100) qualified individuals in 248
this state. 249
(e) A statement that the organization does not provide, 250
pay for or provide coverage of abortions and does not financially 251
support any other entity that provides, pays for or provides 252
coverage of abortions. 253
(f) Any other information that the department requires 254
to administer this section. 255
( * * *12) The department shall review each written 256
certification and determine whether the organization meets all the 257
criteria to be considered a qualifying charitable organization and 258
notify the organization of its determination. The department may 259
also periodically request recertification from the organization. 260
The department shall compile and make available to the public a 261
list of the qualifying charitable organizations. 262
( * * *13) The aggregate amount of tax credits that may be 263
awarded under this section in any calendar year shall not exceed 264
Three Million Dollars ($3,000,000.00). However, for calendar year 265
2021, and for each calendar year thereafter through calendar year 266
2025, the aggregate amount of tax credits that may be awarded 267
under this section in any calendar year shall not exceed One 268
Million Dollars ($1,000,000.00). For calendar year 2026 and for 269
each calendar year thereafter, the aggregate amount of tax credits 270
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that may be awarded under this section in any calendar year shall 271
not exceed Three Million Dollars ($3,000,000.00). In addition, 272
any tax credits not awarded under this section before June 1, 273
2020, may be allocated during calendar year 2020 under Section 274
27-7-22.41 for contributions by taxpayers to eligible charitable 275
organizations described in Section 27-7-22.41(1)(b)(ii) as 276
provided under such section, notwithstanding any limitation on the 277
percentage of tax credits that may be allocated for such 278
contributions. 279
( * * *14) A taxpayer shall apply for credits with the 280
department on forms prescribed by the department. In the 281
application the taxpayer shall certify to the department the 282
dollar amount of the contributions made or to be made during the 283
calendar year. Within thirty (30) days after the receipt of an 284
application, the department shall allocate credits based on the 285
dollar amount of contributions as certified in the application. 286
However, if the department cannot allocate the full amount of 287
credits certified in the application due to the limit on the 288
aggregate amount of credits that may be awarded under this section 289
in a calendar year, the department shall so notify the applicant 290
within thirty (30) days with the amount of credits, if any, that 291
may be allocated to the applicant in the calendar year. Once the 292
department has allocated credits to a taxpayer, if the 293
contribution for which a credit is allocated has not been made as 294
of the date of the allocation, then the contribution must be made 295
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ST: Income tax; authorize a credit for
contributions by certain taxpayers to certain
charitable organizations.
not later than sixty (60) days from the date of the allocation. 296
If the contribution is not made within such time period, the 297
allocation shall be cancelled and returned to the department for 298
reallocation. Upon final documentation of the contributions, if 299
the actual dollar amount of the contributions is lower than the 300
amount estimated, the department shall adjust the tax credit 301
allowed under this section. 302
SECTION 2. Nothing in this act shall affect or defeat any 303
claim, assessment, appeal, suit, right or cause of action for 304
taxes due or accrued under the income tax laws before the date on 305
which this act becomes effective, whether such claims, 306
assessments, appeals, suits or actions have been begun before the 307
date on which this act becomes effective or are begun thereafter; 308
and the provisions of the income tax laws are expressly continued 309
in full force, effect and operation for the purpose of the 310
assessment, collection and enrollment of liens for any taxes due 311
or accrued and the execution of any warrant under such laws before 312
the date on which this act becomes effective, and for the 313
imposition of any penalties, forfeitures or claims for failure to 314
comply with such laws. 315
SECTION 3. This act shall take effect and be in force from 316
and after January 1, 2026. 317