Portable benefit accounts; allow hiring party to contribute funds to for benefit plans for independent contractors.

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To: Business and Commerce
MISSISSIPPI LEGISLATURE REGULAR SESSION 2026

By: Representative Lamar

HOUSE BILL NO. 866

AN ACT TO PROVIDE FOR THE ESTABLISHMENT OF PORTABLE BENEFIT 1
ACCOUNTS FOR INDEPENDENT CONTRACTORS; TO AUTHORIZE A HIRING PARTY 2
TO CONTRIBUTE FUNDS TO THE PORTABLE BENEFIT ACCOUNT FOR AN 3
INDEPENDENT CONTRACTOR; TO PROVIDE THAT A HIRING PARTY MAY 4
WITHHOLD A PERCENTAGE OF FUNDS FROM THE COMPENSATION OWED TO AN 5
INDEPENDENT CONTRACTOR IF BOTH PARTIES AGREE TO THE WITHHOLDING IN 6
WRITING; TO BRING FORWARD SECTIONS 27-7-16, 27-7-17 AND 71-9-5, 7
MISSISSIPPI CODE OF 1972, FOR THE PURPOSE OF POSSIBLE AMENDMENT; 8
AND FOR RELATED PURPOSES. 9
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI: 10
SECTION 1. (1) As used in this section, the following words 11
shall have the meanings as defined in this subsection, unless the 12
context clearly indicates otherwise: 13
(a) "Bank" means that term as defined in Section 14
3(a)(1) of the Federal Deposit Insurance Act (12 USC Section 15
1813(a)(1)). 16
(b) "Benefit plan" means benefits that may customarily 17
be provided by an employer as part of a benefit plan, including, 18
but not limited to: 19
(i) Health insurance; 20
(ii) Income replacement insurance; 21
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(iii) Life insurance; and 22
(iv) Retirement benefits. 23
(c) "Hiring party" means a person or entity who hires 24
or enters into a contract with an independent contractor for the 25
performance of work. 26
(d) "Independent contractor" means a person who 27
contracts to do a piece of work according to his or her own 28
methods without being subject to the control of his or her 29
employer except as to the results of the work, and who has the 30
right to employ and direct the outcome of the workers independent 31
of the employer and free from any superior authority in the 32
employer to say how the specified work must be done or what the 33
laborers must do as the work progresses. 34
(e) "Portable benefit account" means an account: 35
(i) Owned by an independent contractor for the 36
purpose of funding the purchase of one or more benefit plans; 37
(ii) Administered by a third-party portable 38
benefit account provider chosen by the independent contractor; and 39
(iii) Assigned to a beneficiary of one or more 40
benefit plans rather than a hiring party. 41
(f) "Portable benefit account provider" means: 42
(i) A bank; 43
(ii) An investment management firm; or 44
(iii) A technology provider or program manager 45
that offers services through a bank or investment management firm. 46
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(2) A hiring party, including an Internet or application 47
based entity, may contribute funds to a portable benefit account 48
for an independent contractor. 49
(3) Contributions to a portable benefit account may be made 50
using the funds of a hiring party or a percentage of funds 51
withheld from the compensation owed to an independent contractor, 52
as long as: 53
(a) Both the hiring party and the independent 54
contractor have agreed to withholding such compensation in a 55
written agreement; 56
(b) The written agreement is clear, unambiguous and 57
prominently displayed either in the contract for work entered into 58
between the hiring party and the independent contractor, or in a 59
separate notice; 60
(c) The withholdings are voluntary and require the 61
independent contractor to opt-in; and 62
(d) The independent contractor may choose to opt-out of 63
the withholdings at any time. 64
(4) Contributions to a portable benefit account may not be 65
used as a criterion for determining a worker's employment 66
classification or construed by a Mississippi court as any element 67
of an employment relationship, including, but not limited to, for 68
purposes of imposing liability on the hiring party under the 69
Workers' Compensation Law (Chapter 3, Title 71, Mississippi Code 70
of 1972). This section may not be construed to create a right for 71
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independent contractors to receive compensation under the Workers' 72
Compensation Law or to participate in any state retirement plan. 73
SECTION 2. Section 27-7-16, Mississippi Code of 1972, is 74
brought forward as follows: 75
27-7-16. Amounts contributed in the taxable year by 76
employees and/or self-employed individuals, including partners, to 77
an employees' pension trust, tax-sheltered annuity plan, 78
authorized deferred compensation plan, self-employed retirement 79
plan, individual retirement account or retirement bond which meets 80
the requirements of a qualified plan under the provisions of the 81
Internal Revenue Code of 1986, as amended, shall be deductible 82
from gross income, subject to the conditions and limitations of 83
the Internal Revenue Code of 1986, as amended. Amounts 84
contributed in the taxable year to a Roth individual retirement 85
account shall be treated in the same manner as provided under the 86
Internal Revenue Code of 1986, as amended. 87
SECTION 3. Section 27-7-17, Mississippi Code of 1972, is 88
brought forward as follows: 89
27-7-17. In computing taxable income, there shall be allowed 90
as deductions: 91
(1) Business deductions. 92
(a) Business expenses. All the ordinary and necessary 93
expenses paid or incurred during the taxable year in carrying on 94
any trade or business, including a reasonable allowance for 95
salaries or other compensation for personal services actually 96
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rendered; nonreimbursable traveling expenses incident to current 97
employment, including a reasonable amount expended for meals and 98
lodging while away from home in the pursuit of a trade or 99
business; and rentals or other payments required to be made as a 100
condition of the continued use or possession, for purposes of the 101
trade or business of property to which the taxpayer has not taken 102
or is not taking title or in which he had no equity. Expense 103
incurred in connection with earning and distributing nontaxable 104
income is not an allowable deduction. Limitations on 105
entertainment expenses shall conform to the provisions of the 106
Internal Revenue Code of 1986. There shall also be allowed a 107
deduction for expenses as provided in Section 41-137-51. 108
(b) Interest. All interest paid or accrued during the 109
taxable year on business indebtedness, except interest upon the 110
indebtedness for the purchase of tax-free bonds, or any stocks, 111
the dividends from which are nontaxable under the provisions of 112
this article; provided, however, in the case of securities 113
dealers, interest payments or accruals on loans, the proceeds of 114
which are used to purchase tax-exempt securities, shall be 115
deductible if income from otherwise tax-free securities is 116
reported as income. Investment interest expense shall be limited 117
to investment income. Interest expense incurred for the purchase 118
of treasury stock, to pay dividends, or incurred as a result of an 119
undercapitalized affiliated corporation may not be deducted unless 120
an ordinary and necessary business purpose can be established to 121
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the satisfaction of the commissioner. For the purposes of this 122
paragraph, the phrase "interest upon the indebtedness for the 123
purchase of tax-free bonds" applies only to the indebtedness 124
incurred for the purpose of directly purchasing tax-free bonds and 125
does not apply to any other indebtedness incurred in the regular 126
course of the taxpayer's business. Any corporation, association, 127
organization or other entity taxable under Section 27-7-23(c) 128
shall allocate interest expense as provided in Section 129
27-7-23(c)(3)(I). 130
(c) Taxes. Taxes paid or accrued within the taxable 131
year, except state and federal income taxes, excise taxes based on 132
or measured by net income, estate and inheritance taxes, gift 133
taxes, cigar and cigarette taxes, gasoline taxes, and sales and 134
use taxes unless incurred as an item of expense in a trade or 135
business or in the production of taxable income. In the case of 136
an individual, taxes permitted as an itemized deduction under the 137
provisions of subsection (3)(a) of this section are to be claimed 138
thereunder. 139
(d) Business losses. 140
(i) Losses sustained during the taxable year not 141
compensated for by insurance or otherwise, if incurred in trade or 142
business, or nonbusiness transactions entered into for profit. 143
(ii) Limitations on losses from passive activities 144
and rental real estate shall conform to the provisions of the 145
Internal Revenue Code of 1986. 146
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(e) Bad debts. Losses from debts ascertained to be 147
worthless and charged off during the taxable year, if sustained in 148
the conduct of the regular trade or business of the taxpayer; 149
provided, that such losses shall be allowed only when the taxpayer 150
has reported as income, on the accrual basis, the amount of such 151
debt or account. 152
(f) Depreciation. (i) A reasonable allowance for 153
exhaustion, wear and tear of property used in the trade or 154
business, or rental property, and depreciation upon buildings 155
based upon their reasonable value as of March 16, 1912, if 156
acquired prior thereto, and upon cost if acquired subsequent to 157
that date. In the case of new or used aircraft, equipment, 158
engines, or other parts and tools used for aviation, allowance for 159
bonus depreciation conforms with the federal bonus depreciation 160
rates and reasonable allowance for depreciation under this section 161
is no less than one hundred percent (100%). 162
(ii) 1. For the purposes of computing income tax 163
for tax years beginning after December 31, 2022, a taxpayer may 164
treat specified research or experimental expenditures that are 165
paid or incurred by the taxpayer during the tax year in connection 166
with the taxpayer's trade or business as expenses that are not 167
chargeable to the capital account. Such expenditures so treated 168
shall be allowed as an immediate deduction. Such expenditures 169
shall remain allowable as a full and immediate expense deduction 170
in the year in which the expenses are incurred notwithstanding any 171
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changes to the federal Internal Revenue Code related to the 172
depreciation of such specified research or experimental 173
expenditures. A taxpayer may alternatively treat the depreciation 174
of such specified research or experimental expenditures in 175
accordance with the schedule provided in 26 USCS Section 174. A 176
taxpayer may make an election whether to take a full and immediate 177
deduction for such expenditures and/or to depreciate the 178
expenditures in accordance with 26 USCS Section 174. Such an 179
election may be made for any tax year if made not later than the 180
time prescribed by law for filing the return for such tax year, 181
including extensions thereof. The method so elected by the 182
taxpayer is irrevocable unless the commissioner specifically 183
allows a change in the method. 184
2. For the purpose of computing income tax 185
for tax years beginning after December 31, 2022, expenditures for 186
business assets that are qualified property or qualified 187
improvement property shall be eligible for one hundred percent 188
(100%) bonus depreciation and may be deducted as an expense 189
incurred by the taxpayer during the tax year during which the 190
property is placed in service, notwithstanding any changes to 191
federal law related to cost recovery beginning on January 1, 2023, 192
or on any other date. A taxpayer may alternatively treat the 193
depreciation of such business assets in accordance with the 194
schedule provided in 26 USCS Section 168. A taxpayer may make an 195
election whether to take a bonus depreciation deduction for such 196
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expenditures and/or to depreciate the expenditures in accordance 197
with 26 USCS Section 168. Such an election may be made for any 198
tax year if made not later than the time prescribed by law for 199
filing the return for such tax year, including extensions thereof. 200
The method so elected by the taxpayer is irrevocable unless the 201
commissioner specifically allows a change in the method. 202
3. In any taxable year in which any 26 USCS 203
Section 179 property is placed in service, a taxpayer may elect to 204
treat the cost of such property as an expense which is not 205
chargeable to a capital account, and any cost so treated shall be 206
allowed as a deduction for that year. Mississippi's treatment of 207
the deduction shall conform to the provisions of 26 USCS Section 208
179 in effect for that year. 209
4. For the purposes of this subparagraph 210
(ii), unless the context requires otherwise, the following terms 211
shall have the meanings ascribed herein: 212
a. "Qualified improvement property" 213
means and has the same definition as such term has in 26 USCS 214
Section 168(e)(6) as it existed on January 1, 2021, and shall 215
apply to property placed in service after December 31, 2022. 216
b. "Qualified property" means and has 217
the same definition as such term has in 26 USCS Section 168(k) as 218
it existed on January 1, 2021, and shall apply to property placed 219
in service after December 31, 2022. 220
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c. "Specified research or experimental 221
expenditures" means and has the same definition as such term has 222
in 26 USCS Section 174 as it existed on January 1, 2021. 223
5. Nothing in this subparagraph (ii) shall be 224
construed to nullify or otherwise alter the treatment of 225
depreciation expenses for any tax year prior to 2023. 226
6. The total of any method or combination of 227
methods of depreciation used under this subparagraph (ii) cannot 228
exceed one hundred percent (100%) of the cost of the subject 229
property. 230
(g) Depletion. In the case of mines, oil and gas 231
wells, other natural deposits and timber, a reasonable allowance 232
for depletion and for depreciation of improvements, based upon 233
cost, including cost of development, not otherwise deducted, or 234
fair market value as of March 16, 1912, if acquired prior to that 235
date, such allowance to be made upon regulations prescribed by the 236
commissioner, with the approval of the Governor. 237
(h) Contributions or gifts. Except as otherwise 238
provided in paragraph (p) of this subsection or subsection (3)(a) 239
of this section for individuals, contributions or gifts made by 240
corporations within the taxable year to corporations, 241
organizations, associations or institutions, including Community 242
Chest funds, foundations and trusts created solely and exclusively 243
for religious, charitable, scientific or educational purposes, or 244
for the prevention of cruelty to children or animals, no part of 245
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the net earnings of which inure to the benefit of any private 246
stockholder or individual. This deduction shall be allowed in an 247
amount not to exceed twenty percent (20%) of the net income. Such 248
contributions or gifts shall be allowable as deductions only if 249
verified under rules and regulations prescribed by the 250
commissioner, with the approval of the Governor. Contributions 251
made in any form other than cash shall be allowed as a deduction, 252
subject to the limitations herein provided, in an amount equal to 253
the actual market value of the contributions at the time the 254
contribution is actually made and consummated. 255
(i) Reserve funds - insurance companies. In the case 256
of insurance companies the net additions required by law to be 257
made within the taxable year to reserve funds when such reserve 258
funds are maintained for the purpose of liquidating policies at 259
maturity. 260
(j) Annuity income. The sums, other than dividends, 261
paid within the taxpayer year on policy or annuity contracts when 262
such income has been included in gross income. 263
(k) Contributions to employee pension plans. 264
Contributions made by an employer to a plan or a trust forming 265
part of a pension plan, stock bonus plan, disability or 266
death-benefit plan, or profit-sharing plan of such employer for 267
the exclusive benefit of some or all of his, their, or its 268
employees, or their beneficiaries, shall be deductible from his, 269
their, or its income only to the extent that, and for the taxable 270
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year in which, the contribution is deductible for federal income 271
tax purposes under the Internal Revenue Code of 1986 and any other 272
provisions of similar purport in the Internal Revenue Laws of the 273
United States, and the rules, regulations, rulings and 274
determinations promulgated thereunder, provided that: 275
(i) The plan or trust be irrevocable. 276
(ii) The plan or trust constitute a part of a 277
pension plan, stock bonus plan, disability or death-benefit plan, 278
or profit-sharing plan for the exclusive benefit of some or all of 279
the employer's employees and/or officers, or their beneficiaries, 280
for the purpose of distributing the corpus and income of the plan 281
or trust to such employees and/or officers, or their 282
beneficiaries. 283
(iii) No part of the corpus or income of the plan 284
or trust can be used for purposes other than for the exclusive 285
benefit of employees and/or officers, or their beneficiaries. 286
Contributions to all plans or to all trusts of real or 287
personal property (or real and personal property combined) or to 288
insured plans created under a retirement plan for which provision 289
has been made under the laws of the United States of America, 290
making such contributions deductible from income for federal 291
income tax purposes, shall be deductible only to the same extent 292
under the Income Tax Laws of the State of Mississippi. 293
(l) Net operating loss carrybacks and carryovers. A 294
net operating loss for any taxable year ending after December 31, 295
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1993, and taxable years thereafter, shall be a net operating loss 296
carryback to each of the three (3) taxable years preceding the 297
taxable year of the loss. If the net operating loss for any 298
taxable year is not exhausted by carrybacks to the three (3) 299
taxable years preceding the taxable year of the loss, then there 300
shall be a net operating loss carryover to each of the fifteen 301
(15) taxable years following the taxable year of the loss 302
beginning with any taxable year after December 31, 1991. 303
For any taxable year ending after December 31, 1997, the 304
period for net operating loss carrybacks and net operating loss 305
carryovers shall be the same as those established by the Internal 306
Revenue Code and the rules, regulations, rulings and 307
determinations promulgated thereunder as in effect at the taxable 308
year end or on December 31, 2000, whichever is earlier. 309
A net operating loss for any taxable year ending after 310
December 31, 2001, and taxable years thereafter, shall be a net 311
operating loss carryback to each of the two (2) taxable years 312
preceding the taxable year of the loss. If the net operating loss 313
for any taxable year is not exhausted by carrybacks to the two (2) 314
taxable years preceding the taxable year of the loss, then there 315
shall be a net operating loss carryover to each of the twenty (20) 316
taxable years following the taxable year of the loss beginning 317
with any taxable year after the taxable year of the loss. 318
The term "net operating loss," for the purposes of this 319
paragraph, shall be the excess of the deductions allowed over the 320
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gross income; provided, however, the following deductions shall 321
not be allowed in computing same: 322
(i) No net operating loss deduction shall be 323
allowed. 324
(ii) No personal exemption deduction shall be 325
allowed. 326
(iii) Allowable deductions which are not 327
attributable to taxpayer's trade or business shall be allowed only 328
to the extent of the amount of gross income not derived from such 329
trade or business. 330
Any taxpayer entitled to a carryback period as provided by 331
this paragraph may elect to relinquish the entire carryback period 332
with respect to a net operating loss for any taxable year ending 333
after December 31, 1991. The election shall be made in the manner 334
prescribed by the Department of Revenue and shall be made by the 335
due date, including extensions of time, for filing the taxpayer's 336
return for the taxable year of the net operating loss for which 337
the election is to be in effect. The election, once made for any 338
taxable year, shall be irrevocable for that taxable year. 339
(m) Amortization of pollution or environmental control 340
facilities. Allowance of deduction. Every taxpayer, at his 341
election, shall be entitled to a deduction for pollution or 342
environmental control facilities to the same extent as that 343
allowed under the Internal Revenue Code and the rules, 344
regulations, rulings and determinations promulgated thereunder. 345
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(n) Dividend distributions - real estate investment 346
trusts. "Real estate investment trust" (hereinafter referred to 347
as REIT) shall have the meaning ascribed to such term in Section 348
856 of the federal Internal Revenue Code of 1986, as amended. A 349
REIT is allowed a dividend distributed deduction if the dividend 350
distributions meet the requirements of Section 857 or are 351
otherwise deductible under Section 858 or 860, federal Internal 352
Revenue Code of 1986, as amended. In addition: 353
(i) A dividend distributed deduction shall only be 354
allowed for dividends paid by a publicly traded REIT. A qualified 355
REIT subsidiary shall be allowed a dividend distributed deduction 356
if its owner is a publicly traded REIT. 357
(ii) Income generated from real estate contributed 358
or sold to a REIT by a shareholder or related party shall not give 359
rise to a dividend distributed deduction, unless the shareholder 360
or related party would have received the dividend distributed 361
deduction under this chapter. 362
(iii) A holding corporation receiving a dividend 363
from a REIT shall not be allowed the deduction in Section 364
27-7-15(4)(t). 365
(iv) Any REIT not allowed the dividend distributed 366
deduction in the federal Internal Revenue Code of 1986, as 367
amended, shall not be allowed a dividend distributed deduction 368
under this chapter. 369
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The commissioner is authorized to promulgate rules and 370
regulations consistent with the provisions in Section 269 of the 371
federal Internal Revenue Code of 1986, as amended, so as to 372
prevent the evasion or avoidance of state income tax. 373
(o) Contributions to college savings trust fund 374
accounts. Contributions or payments to a Mississippi Affordable 375
College Savings Program account are deductible as provided under 376
Section 37-155-113. Payments made under a prepaid tuition 377
contract entered into under the Mississippi Prepaid Affordable 378
College Tuition Program are deductible as provided under Section 379
37-155-17. 380
(p) Contributions of human pharmaceutical products. To 381
the extent that a "major supplier" as defined in Section 382
27-13-13(2)(d) contributes human pharmaceutical products in excess 383
of Two Hundred Fifty Million Dollars ($250,000,000.00) as 384
determined under Section 170 of the Internal Revenue Code, the 385
charitable contribution limitation associated with those donations 386
shall follow the federal limitation but cannot result in the 387
Mississippi net income being reduced below zero. 388
(q) Contributions to ABLE trust fund accounts. 389
Contributions or payments to a Mississippi Achieving a Better Life 390
Experience (ABLE) Program account are deductible as provided under 391
Section 43-28-13. 392
(2) Restrictions on the deductibility of certain intangible 393
expenses and interest expenses with a related member. 394
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(a) As used in this subsection (2): 395
(i) "Intangible expenses and costs" include: 396
1. Expenses, losses and costs for, related 397
to, or in connection directly or indirectly with the direct or 398
indirect acquisition, use, maintenance or management, ownership, 399
sale, exchange or any other disposition of intangible property to 400
the extent such amounts are allowed as deductions or costs in 401
determining taxable income under this chapter; 402
2. Expenses or losses related to or incurred 403
in connection directly or indirectly with factoring transactions 404
or discounting transactions; 405
3. Royalty, patent, technical and copyright 406
fees; 407
4. Licensing fees; and 408
5. Other similar expenses and costs. 409
(ii) "Intangible property" means patents, patent 410
applications, trade names, trademarks, service marks, copyrights 411
and similar types of intangible assets. 412
(iii) "Interest expenses and cost" means amounts 413
directly or indirectly allowed as deductions for purposes of 414
determining taxable income under this chapter to the extent such 415
interest expenses and costs are directly or indirectly for, 416
related to, or in connection with the direct or indirect 417
acquisition, maintenance, management, ownership, sale, exchange or 418
disposition of intangible property. 419
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(iv) "Related member" means an entity or person 420
that, with respect to the taxpayer during all or any portion of 421
the taxable year, is a related entity, a component member as 422
defined in the Internal Revenue Code, or is an entity or a person 423
to or from whom there is attribution of stock ownership in 424
accordance with Section 1563(e) of the Internal Revenue Code. 425
(v) "Related entity" means: 426
1. A stockholder who is an individual or a 427
member of the stockholder's family, as defined in regulations 428
prescribed by the commissioner, if the stockholder and the members 429
of the stockholder's family own, directly, indirectly, 430
beneficially or constructively, in the aggregate, at least fifty 431
percent (50%) of the value of the taxpayer's outstanding stock; 432
2. A stockholder, or a stockholder's 433
partnership, limited liability company, estate, trust or 434
corporation, if the stockholder and the stockholder's 435
partnerships, limited liability companies, estates, trusts and 436
corporations own, directly, indirectly, beneficially or 437
constructively, in the aggregate, at least fifty percent (50%) of 438
the value of the taxpayer's outstanding stock; 439
3. A corporation, or a party related to the 440
corporation in a manner that would require an attribution of stock 441
from the corporation to the party or from the party to the 442
corporation, if the taxpayer owns, directly, indirectly, 443
beneficially or constructively, at least fifty percent (50%) of 444
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the value of the corporation's outstanding stock under regulation 445
prescribed by the commissioner; 446
4. Any entity or person which would be a 447
related member under this section if the taxpayer were considered 448
a corporation for purposes of this section. 449
(b) In computing net income, a taxpayer shall add back 450
otherwise deductible interest expenses and costs and intangible 451
expenses and costs directly or indirectly paid, accrued to or 452
incurred, in connection directly or indirectly with one or more 453
direct or indirect transactions with one or more related members. 454
(c) The adjustments required by this subsection shall 455
not apply to such portion of interest expenses and costs and 456
intangible expenses and costs that the taxpayer can establish 457
meets one (1) of the following: 458
(i) The related member directly or indirectly 459
paid, accrued or incurred such portion to a person during the same 460
income year who is not a related member; or 461
(ii) The transaction giving rise to the interest 462
expenses and costs or intangible expenses and costs between the 463
taxpayer and related member was done primarily for a valid 464
business purpose other than the avoidance of taxes, and the 465
related member is not primarily engaged in the acquisition, use, 466
maintenance or management, ownership, sale, exchange or any other 467
disposition of intangible property. 468
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(d) Nothing in this subsection shall require a taxpayer 469
to add to its net income more than once any amount of interest 470
expenses and costs or intangible expenses and costs that the 471
taxpayer pays, accrues or incurs to a related member. 472
(e) The commissioner may prescribe such regulations as 473
necessary or appropriate to carry out the purposes of this 474
subsection, including, but not limited to, clarifying definitions 475
of terms, rules of stock attribution, factoring and discount 476
transactions. 477
(3) Individual nonbusiness deductions. 478
(a) The amount allowable for individual nonbusiness 479
itemized deductions for federal income tax purposes where the 480
individual is eligible to elect, for the taxable year, to itemize 481
deductions on his federal return except the following: 482
(i) The deduction for state income taxes paid or 483
other taxes allowed for federal purposes in lieu of state income 484
taxes paid; 485
(ii) The deduction for gaming losses from gaming 486
establishments; 487
(iii) The deduction for taxes collected by 488
licensed gaming establishments pursuant to Section 27-7-901; 489
(iv) The deduction for taxes collected by gaming 490
establishments pursuant to Section 27-7-903; and 491
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(v) The deduction for medical expenses for the 492
provision of gender transition procedures as defined in Section 493
41-141-3. 494
(b) In lieu of the individual nonbusiness itemized 495
deductions authorized in paragraph (a), for all purposes other 496
than ordinary and necessary expenses paid or incurred during the 497
taxable year in carrying on any trade or business, an optional 498
standard deduction of: 499
(i) Three Thousand Four Hundred Dollars 500
($3,400.00) through calendar year 1997, Four Thousand Two Hundred 501
Dollars ($4,200.00) for the calendar year 1998 and Four Thousand 502
Six Hundred Dollars ($4,600.00) for each calendar year thereafter 503
in the case of married individuals filing a joint or combined 504
return; 505
(ii) One Thousand Seven Hundred Dollars 506
($1,700.00) through calendar year 1997, Two Thousand One Hundred 507
Dollars ($2,100.00) for the calendar year 1998 and Two Thousand 508
Three Hundred Dollars ($2,300.00) for each calendar year 509
thereafter in the case of married individuals filing separate 510
returns; 511
(iii) Three Thousand Four Hundred Dollars 512
($3,400.00) in the case of a head of family; or 513
(iv) Two Thousand Three Hundred Dollars 514
($2,300.00) in the case of an individual who is not married. 515
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In the case of a husband and wife living together, having 516
separate incomes, and filing combined returns, the standard 517
deduction authorized may be divided in any manner they choose. In 518
the case of separate returns by a husband and wife, the standard 519
deduction shall not be allowed to either if the taxable income of 520
one of the spouses is determined without regard to the standard 521
deduction. 522
(c) A nonresident individual shall be allowed the same 523
individual nonbusiness deductions as are authorized for resident 524
individuals in paragraph (a) or (b) of this subsection; however, 525
the nonresident individual is entitled only to that proportion of 526
the individual nonbusiness deductions as his net income from 527
sources within the State of Mississippi bears to his total or 528
entire net income from all sources. 529
(4) Nothing in this section shall permit the same item to be 530
deducted more than once, either in fact or in effect. 531
(5) Notwithstanding any other provision in Title 27, 532
Mississippi Code of 1972, there shall be allowed an income tax 533
deduction for otherwise deductible expenses if: 534
(a) The payment(s) for such deductible expenses are 535
made with the grant or loan program of the Paycheck Protection 536
Program as authorized under (i) the Coronavirus Aid, Relief, and 537
Economic Security (CARES) Act and the Consolidated Appropriations 538
Act of 2021, (ii) the COVID-19 Economic Injury Disaster Loan 539
Program, (iii) the 2020 COVID-19 Mississippi Business Assistance 540
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Act, (iv) the Rental Assistance Grant Program, (v) the Shuttered 541
Venue Operators Grant Program and Restaurant Revitalization Fund 542
authorized by the Economic Aid to Hard-Hit Small Businesses, 543
Nonprofits, and Venues Act, and amended by the federal American 544
Rescue Plan Act, and/or (vi) the Mississippi Agriculture 545
Stabilization Act; and 546
(b) Such deductible expenses shall be allowed as 547
deductions for federal income tax purposes. 548
SECTION 4. Section 71-9-5, Mississippi Code of 1972, is 549
brought forward as follows: 550
71-9-5. (1) Each employer shall be permitted to offer 551
voluntarily the following programs: 552
(a) Continued coverage under the employer's existing 553
health coverage policy, certificate or contract; or 554
(b) Participation in a medical savings account program. 555
(2) An employer that previously did not provide an accident 556
and health insurance policy, certificate or contract for his or 557
her employees may establish a medical savings account program. In 558
this case, the premium reduction referred to in Section 559
71-9-3(j)(ii) of this chapter shall be based on the cost of 560
similar coverage with a Five Hundred Dollar ($500.00) deductible. 561
(3) A resident individual may establish a medical savings 562
account for the benefit of himself or herself and his or her 563
dependents. Contributions to a medical savings account 564
established by a resident individual for a tax year shall not 565
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ST: Portable benefit accounts; allow hiring
party to contribute funds to for benefit plans
for independent contractors.
exceed the allowable deductible for a qualified higher deductible 566
health plan. 567
(4) Except as otherwise provided by law, the principal 568
contributed and the interest earned on a medical savings account 569
shall be excluded from the taxable gross income of the account 570
holder under Section 27-7-15. 571
SECTION 5. This act shall take effect and be in force from 572
and after July 1, 2026. 573