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To: Ways and Means
MISSISSIPPI LEGISLATURE REGULAR SESSION 2026
By: Representative Lamar
COMMITTEE SUBSTITUTE
FOR
HOUSE BILL NO. 4039
AN ACT TO AMEND SECTION 57-73-23, MISSISSIPPI CODE OF 1972, 1
WHICH AUTHORIZES AN INCOME TAX CREDIT FOR EMPLOYERS PROVIDING 2
DEPENDENT CARE FOR EMPLOYEES DURING WORK HOURS AND FOR EMPLOYERS 3
THAT PROVIDE A CHILD CARE STIPEND TO BE USED FOR CHILD CARE DURING 4
EMPLOYEES' WORK HOURS, TO REDUCE THE AMOUNT OF THE REQUIRED 5
STIPEND AND TO PROVIDE FOR THE STIPEND TO BE FOR DIRECT PAYMENTS 6
TO A LICENSED OR REGISTERED ENTITY, OR OTHER GOVERNMENTAL, OR 7
ACCREDITING AGENCY OR ENTITY PROVIDING DEPENDENT CHILD CARE; TO 8
PROVIDE THAT THE TAX CREDIT ALLOWED MAY NOT EXCEED $3,000.00 PER 9
YEAR FOR EACH CHILD OF A PARTICIPATING EMPLOYEE; TO PROVIDE THAT 10
IN LIEU OF CLAIMING A TAX CREDIT, A TAXPAYER MAY ELECT TO CLAIM A 11
REBATE IN THE AMOUNT OF 75% OF THE AMOUNT THAT WOULD BE ELIGIBLE 12
TO CLAIM AS A CREDIT; TO PROVIDE THAT THE MAXIMUM AGGREGATE AMOUNT 13
OF CREDITS AND REBATES THAT MAY BE USED BY A TAXPAYER IN A TAXABLE 14
YEAR CANNOT EXCEED $50,000.00; TO PROVIDE THAT THE MAXIMUM 15
AGGREGATE AMOUNT OF TAX CREDITS AND REBATES THAT MAY BE AWARDED 16
CANNOT EXCEED $5,000,000.00 FOR ANY ONE TAXABLE YEAR; AND FOR 17
RELATED PURPOSES. 18
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI: 19
SECTION 1. Section 57-73-23, Mississippi Code of 1972, is 20
amended as follows: 21
57-73-23. (1) A fifty percent (50%) income tax credit shall 22
be granted to any employer providing dependent care for employees 23
during the employee's work hours, and to any employer who provides 24
a child care stipend of at least * * * Two Thousand Dollars 25
($2,000.00) per child for direct payments made to a licensed or 26
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registered entity, or other governmental, or accrediting agency or 27
entity providing dependent child care in the State of Mississippi 28
for an employee's children during the employee's work hours. The 29
credit allowed may not exceed Three Thousand Dollars ($3,000.000) 30
per year for each child of a participating employee. 31
(2) In order for an employer who provides a child care 32
stipend under this section to be eligible for the tax credit, the 33
employer shall certify to the Department of Revenue: 34
(a) The names of the employees on whose behalf the 35
stipend is paid; * * * 36
(b) The amount of the stipend paid on behalf of each of 37
those employees; 38
(c) The licensed or registered entity receiving the 39
child care stipend from the employer on behalf of the employee, 40
including the entity's federal identification number and license 41
and registration number as listed on the State Department of 42
Health Registry, or other governmental, or accrediting agency or 43
entity receiving the child care stipend from the employer on 44
behalf of the employee; and 45
(d) Such other information as may be required by the 46
Department of Revenue to ensure that credits under this section 47
are granted only to employers who provide stipends to a licensed 48
or registered entity, or other governmental, or accrediting agency 49
or entity providing dependent care in the State of Mississippi for 50
an employee's children during the employee's work hours. 51
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(3) For an employer contracting with a licensed or 52
registered entity to provide dependent care for its employees 53
during the employee's work hours, the credit is applied to the net 54
cost of any contract executed by the employer for another entity 55
to provide dependent care; or, if the employer elects to provide 56
dependent care itself, the credit is applied to expenses of 57
dependent care staff, learning and recreational materials and 58
equipment, and the construction and maintenance of a facility; or, 59
if the employer elects to provide a child care stipend to a 60
licensed or registered entity providing dependent care in the 61
State of Mississippi for the employee's children during the 62
employee's work hours, the credit is applied to the amount of the 63
stipend provided. Additional eligible expenses include net costs 64
assumed by the employer which increase the quality, availability 65
and affordability of dependent care in the community used by 66
employees during the employee's work hours. This cost is net of 67
any reimbursement. A deduction shall not be allowed for any 68
expenses which serve as the basis for an income tax credit. The 69
credits allowed under this section shall not be used by any 70
business enterprise or corporation other than the business 71
enterprise actually qualifying for the credits. 72
Credit may be carried forward for the five (5) successive 73
years if the amount allowable as credit exceeds income tax 74
liability in a tax year; however, thereafter, if the amount 75
allowable as a credit exceeds the tax liability, the amount of 76
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excess shall not be refundable or carried forward to any other 77
taxable year. In lieu of claiming a tax credit, a taxpayer may 78
elect to claim a rebate in the amount of seventy-five percent 79
(75%) of the amount that would be eligible to claim as a credit. 80
Rebate requests shall be submitted to the Department of Revenue on 81
forms prescribed by the department. The Department of Revenue 82
will then provide the taxpayer with a voucher for the approved 83
amount. Within twelve (12) months of the issuance of the voucher 84
by the Department of Revenue, the taxpayer may submit the voucher 85
to the department to receive payment. Rebates shall be made from 86
current tax collections. The maximum aggregate amount of credits 87
and rebates that may be used by a taxpayer in a taxable year 88
cannot exceed Fifty Thousand Dollars ($50,000.00). 89
The facility must have an average daily enrollment for the 90
taxable year of no less than six (6) children who are twelve (12) 91
years of age or less and be licensed according to the regulations 92
governing licensure of child care facilities in Mississippi; or 93
must serve five (5) or fewer children and/or elderly adults in a 94
family child care/elder care home approved by the Department of 95
Health for participation in the United States Department of 96
Agriculture child and adult nutrition program; or must serve 97
children over twelve (12) years of age but less than eighteen (18) 98
years of age in either a community-based facility or a facility at 99
the employment site; or must serve adult relatives of employees in 100
either a community-based elder care facility or a facility at the 101
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employment site; or must serve children or adult dependents having 102
physical, emotional or mental disabilities in either a 103
community-based facility or a facility at the employment site. 104
Employers * * * shall be certified as eligible for the tax 105
credit if the facility is licensed or registered by the State 106
Department of Health for programs serving children twelve (12) 107
years of age or younger and for programs serving elderly adults 108
and by the Department of Revenue for programs serving other 109
dependents older than twelve (12) years of age at the time of the 110
direct payment to that facility. 111
The maximum aggregate amount of tax credits and rebates that 112
may be awarded under this section shall not exceed Five Million 113
Dollars ($5,000,000.00) for any one (1) taxable year. 114
SECTION 2. Nothing in this act shall affect or defeat any 115
claim, assessment, appeal, suit, right or cause of action for 116
taxes due or accrued under the income tax laws before the date on 117
which this act becomes effective, whether such claims, 118
assessments, appeals, suits or actions have been begun before the 119
date on which this act becomes effective or are begun thereafter; 120
and the provisions of the income tax laws are expressly continued 121
in full force, effect and operation for the purpose of the 122
assessment, collection and enrollment of liens for any taxes due 123
or accrued and the execution of any warrant under such laws before 124
the date on which this act becomes effective, and for the 125
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ST: Income tax; revise credit for employers
providing dependent/child care for employees.
imposition of any penalties, forfeitures or claims for failure to 126
comply with such laws. 127
SECTION 3. This act shall take effect and be in force from 128
and after January 1, 2026. 129