AN ACT TO AUTHORIZE AN INCOME TAX CREDIT FOR CERTAIN TAXPAYERS WHO INCUR CHILD CARE EXPENSES FOR A DEPENDENT CHILD TO ATTEND A CHILD CARE CENTER THAT IS QUALIFIED AS A STANDARD CHILD CARE CENTER OR COMPREHENSIVE CHILD CARE CENTER UNDER THE MISSISSIPPI DEPARTMENT OF HUMAN SERVICES VOLUNTARY CHILD CARE PROGRAM; TO PROVIDE FOR THE AMOUNT OF THE TAX CREDIT; TO AUTHORIZE A REFUNDABLE INCOME TAX CREDIT FOR A TAXPAYER WHO IS QUALIFIED AS A STANDARD CHILD CARE CENTER OR COMPREHENSIVE CHILD CARE CENTER UNDER THE MISSISSIPPI DEPARTMENT OF HUMAN SERVICES VOLUNTARY CHILD CARE PROGRAM; TO PROVIDE FOR THE AMOUNT OF THE TAX CREDIT; TO AUTHORIZE A REFUNDABLE INCOME TAX CREDIT FOR A TAXPAYER WHO IS EMPLOYED AS A TEACHER OR DIRECTOR WITH A CHILD CARE CENTER THAT IS QUALIFIED AS A STANDARD CHILD CARE CENTER OR COMPREHENSIVE CHILD CARE CENTER UNDER THE MISSISSIPPI DEPARTMENT OF HUMAN SERVICES VOLUNTARY CHILD CARE PROGRAM; TO PROVIDE FOR THE AMOUNT OF THE TAX CREDIT; TO AUTHORIZE AN INCOME TAX CREDIT FOR A TAXPAYER WHO DONATES FUNDS TO A CHILD CARE CENTER THAT IS QUALIFIED AS A STANDARD CHILD CARE CENTER OR COMPREHENSIVE CHILD CARE CENTER UNDER THE MISSISSIPPI DEPARTMENT OF HUMAN SERVICES VOLUNTARY CHILD CARE PROGRAM; TO PROVIDE FOR THE AMOUNT OF THE TAX CREDIT; AND FOR RELATED PURPOSES.
HB257 creates a set of Mississippi income tax credits tied to child care. First, it allows eligible taxpayers to claim a credit for child care expenses paid for a dependent child under age six who attended a qualifying child care center for at least eight months during the year. Eligibility is limited to taxpayers whose income or family income does not exceed 400% of the federal poverty level, and the credit is set at $750 per dependent child. For taxpayers below 250% of the federal poverty level, any excess credit is refundable, and unused credits may be carried forward for five years.
The bill also provides refundable credits to child care centers that qualify as standard or comprehensive under the Mississippi Department of Human Services voluntary child care program. Standard centers may claim the lesser of $500 per child per month or $15,000 annually, while comprehensive centers may claim the lesser of $750 per child per month or $20,000 annually. In addition, teachers and directors employed more than nine months at qualifying centers may claim refundable credits of $750 at standard centers or $1,000 at comprehensive centers. Finally, taxpayers who donate to qualifying centers may claim a credit equal to the donation amount up to $5,000, with unused donor credits also eligible for five-year carryforward.
The bill would amend Mississippi’s income tax law by adding new provisions to Title 27, Chapter 7, and it directs the Department of Revenue to adopt rules and administer the credits. The credits would apply beginning January 1, 2026, and would affect individual taxpayers, child care providers, child care employees, and donors to qualifying centers. Because several of the credits are refundable, the bill could reduce state revenue beyond a taxpayer’s income tax liability.
The general sentiment reflected by the bill text is supportive of child care access and workforce stabilization, since it uses tax policy to help families with child care costs and to financially support licensed or recognized child care providers and staff. No committee transcript or vote record was provided, so there is no recorded debate or formal vote history to indicate broader legislative support or opposition.
Potential points of contention likely center on fiscal impact, refundability, and eligibility limits. Questions may arise about the cost to the state, whether the income thresholds and center qualification requirements are appropriately targeted, and whether the credits favor certain providers over others. The donor credit and provider credits may also prompt discussion about whether tax incentives are the best mechanism for supporting child care availability and quality.
HB257 would add new refundable and nonrefundable income tax credits to Mississippi law in Title 27, Chapter 7, covering child care expenses for qualifying families, qualifying child care centers, child care teachers and directors, and donors to qualifying centers. It would require the Department of Revenue to administer the credits and issue implementing regulations, and it would take effect January 1, 2026. The bill would directly affect taxpayers with young children, child care businesses meeting DHS voluntary program standards, and employees and supporters of those centers.
The bill appears generally favorable toward child care families and providers, using tax credits to lower child care costs and support center operations and staffing. Because no committee discussion or vote data were provided, there is no documented opposition or support in the record beyond the bill’s policy design. The structure of the bill suggests an intent to encourage child care participation, quality, and donations through tax incentives.
Likely areas of contention include the fiscal cost of refundable credits, the breadth of eligibility for families up to 400% of poverty, and whether the credits should be limited to centers participating in the DHS voluntary child care program. Some may question the size of the credits, especially the refundable components and the donor credit, while others may argue the bill does not go far enough to address child care affordability and provider compensation. No specific objections or supporters were recorded in the provided materials.