Income tax; increase credit allowed for employers providing dependent care/child care for employees.

H. B. No. 723 *HR43/R1293* ~ OFFICIAL ~ R3/5
26/HR43/R1293
PAGE 1 (BS\KP)

To: Ways and Means
MISSISSIPPI LEGISLATURE REGULAR SESSION 2026

By: Representative McLean

HOUSE BILL NO. 723

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 INCREASE THE AMOUNT OF THE TAX CREDIT; 5
AND FOR RELATED PURPOSES. 6
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI: 7
SECTION 1. Section 57-73-23, Mississippi Code of 1972, is 8
amended as follows: 9
57-73-23. (1) A * * * seventy-five percent (75%) income tax 10
credit shall be granted to any employer providing dependent care 11
for employees during the employee's work hours, and to any 12
employer who provides a child care stipend of at least Six 13
Thousand Dollars ($6,000.00) to a licensed or registered entity 14
providing dependent child care in the State of Mississippi for an 15
employee's children during the employee's work hours. 16
(2) In order for an employer who provides a child care 17
stipend under this section to be eligible for the tax credit, the 18
employer shall certify to the Department of Revenue: 19
H. B. No. 723 *HR43/R1293* ~ OFFICIAL ~
26/HR43/R1293
PAGE 2 (BS\KP)

(a) The names of the employees on whose behalf the 20
stipend is paid; * * * 21
(b) The amount of the stipend paid on behalf of each of 22
those employees; 23
(c) The licensed or registered entity receiving the 24
child care stipend from the employer on behalf of the employee, 25
including the entity's federal identification number and license 26
and registration number; and 27
(d) Such other information as may be required by the 28
Department of Revenue to ensure that credits under this section 29
are granted only to employers who provide stipends to a licensed 30
or registered entity providing dependent care in the State of 31
Mississippi for an employee's children during the employee's work 32
hours. 33
(3) For an employer contracting with a licensed or 34
registered entity to provide dependent care for its employees 35
during the employee's work hours, the credit is applied to the net 36
cost of any contract executed by the employer for another entity 37
to provide dependent care; or, if the employer elects to provide 38
dependent care itself, the credit is applied to expenses of 39
dependent care staff, learning and recreational materials and 40
equipment, and the construction and maintenance of a facility; or, 41
if the employer elects to provide a child care stipend to a 42
licensed or registered entity providing dependent care in the 43
State of Mississippi for the employee's children during the 44
H. B. No. 723 *HR43/R1293* ~ OFFICIAL ~
26/HR43/R1293
PAGE 3 (BS\KP)

employee's work hours, the credit is applied to the amount of the 45
stipend provided. Additional eligible expenses include net costs 46
assumed by the employer which increase the quality, availability 47
and affordability of dependent care in the community used by 48
employees during the employee's work hours. This cost is net of 49
any reimbursement. A deduction shall not be allowed for any 50
expenses which serve as the basis for an income tax credit. The 51
credits allowed under this section shall not be used by any 52
business enterprise or corporation other than the business 53
enterprise actually qualifying for the credits. 54
Credit may be carried forward for the five (5) successive 55
years if the amount allowable as credit exceeds income tax 56
liability in a tax year; however, thereafter, if the amount 57
allowable as a credit exceeds the tax liability, the amount of 58
excess shall not be refundable or carried forward to any other 59
taxable year. 60
The facility must have an average daily enrollment for the 61
taxable year of no less than six (6) children who are twelve (12) 62
years of age or less and be licensed according to the regulations 63
governing licensure of child care facilities in Mississippi; or 64
must serve five (5) or fewer children and/or elderly adults in a 65
family child care/elder care home approved by the Department of 66
Health for participation in the United States Department of 67
Agriculture child and adult nutrition program; or must serve 68
children over twelve (12) years of age but less than eighteen (18) 69
H. B. No. 723 *HR43/R1293* ~ OFFICIAL ~
26/HR43/R1293
PAGE 4 (BS\KP)

years of age in either a community-based facility or a facility at 70
the employment site; or must serve adult relatives of employees in 71
either a community-based elder care facility or a facility at the 72
employment site; or must serve children or adult dependents having 73
physical, emotional or mental disabilities in either a 74
community-based facility or a facility at the employment site. 75
Employers will be certified as eligible for the tax credit by 76
the State Department of Health for programs serving children 77
twelve (12) years of age or younger and for programs serving 78
elderly adults and by the Department of Revenue for programs 79
serving other dependents older than twelve (12) years of age. 80
SECTION 2. Nothing in this act shall affect or defeat any 81
claim, assessment, appeal, suit, right or cause of action for 82
taxes due or accrued under the income tax laws before the date on 83
which this act becomes effective, whether such claims, 84
assessments, appeals, suits or actions have been begun before the 85
date on which this act becomes effective or are begun thereafter; 86
and the provisions of the income tax laws are expressly continued 87
in full force, effect and operation for the purpose of the 88
assessment, collection and enrollment of liens for any taxes due 89
or accrued and the execution of any warrant under such laws before 90
the date on which this act becomes effective, and for the 91
imposition of any penalties, forfeitures or claims for failure to 92
comply with such laws. 93
H. B. No. 723 *HR43/R1293* ~ OFFICIAL ~
26/HR43/R1293
PAGE 5 (BS\KP)
ST: Income tax; increase credit allowed for
employers providing dependent care/child care
for employees.
SECTION 3. This act shall take effect and be in force from 94
and after January 1, 2026. 95