AN ACT TO AUTHORIZE AN INCOME TAX CREDIT FOR VOLUNTARY CASH CONTRIBUTIONS BY TAXPAYERS TO QUALIFYING CHARITABLE ORGANIZATIONS; TO LIMIT THE AMOUNT OF THE TAX CREDIT; TO PROVIDE THAT UNUSED PORTIONS OF A TAX CREDIT MAY BE CARRIED FORWARD FOR FIVE CONSECUTIVE YEARS FROM THE CLOSE OF THE TAX YEAR IN WHICH THE CREDIT WAS EARNED; TO PROVIDE THE CRITERIA THAT A QUALIFYING CHARITABLE ORGANIZATION MUST MEET IN ORDER FOR A CONTRIBUTION TO THE ORGANIZATION TO QUALIFY FOR A TAX CREDIT AUTHORIZED BY THIS ACT; AND FOR RELATED PURPOSES.
SB 2866 would create a Mississippi income tax credit for voluntary cash contributions made to certain qualifying charitable organizations. The credit would be available to individual taxpayers and, in a separate provision, to business taxpayers operating as corporations, LLCs, partnerships, or sole proprietorships. In both cases, the credit would be capped at 50% of the taxpayer’s income tax liability, unused credits could be carried forward for five consecutive years, and the same contribution could not be used both for this credit and as a state income tax deduction.
To qualify, a charitable organization must generally be a 501(c)(3) entity that serves at least 15 “qualified individuals” in Mississippi each year and spends at least 50% of its budget on services to those individuals. The bill defines qualified individuals as adults or children with diagnosed intellectual, developmental, or physical disabilities who cannot live independently or be left unsupervised and who receive care from a nonprofit not funded through Medicaid or Medicare and not a school or mental health provider. The bill also requires organizational certification to the Department of Revenue, public listing by the department, and annual or periodic recertification.
The bill’s impact on state law would be to add a new income tax credit provision to Title 27, Chapter 7 of the Mississippi Code, effective January 1, 2026. It would also establish administrative procedures for applying for the credit, documenting contributions, allocating credits, and limiting the total amount of credits awarded statewide to $500,000 per calendar year for each of the individual and business credit provisions. The measure would therefore reduce state income tax revenue to the extent taxpayers claim the credit, while directing tax-favored donations toward a narrow class of disability-related charitable services.
The bill also imposes content-based eligibility conditions on recipient organizations, including a requirement that they not provide, pay for, or support abortions or entities that do so. That condition, along with the narrow definition of eligible organizations and the exclusion of Medicaid- or Medicare-funded providers, suggests the bill is designed to steer donations to specific nonprofit service providers rather than the broader charitable sector. The Department of Revenue would be responsible for determining eligibility and maintaining a public list of approved organizations.
No committee transcripts or recorded votes were provided, so there is no direct evidence of legislative debate or support/opposition in the available materials. Based on the bill text alone, the measure appears to be framed as a targeted tax incentive for disability-related charitable care, with likely support from advocates for nonprofit disability services and possible concern from critics about the revenue cost, the administrative burden, and the abortion-related eligibility restriction.
SB 2866 would amend Mississippi’s income tax laws by creating a new credit for cash donations to qualifying charitable organizations and codifying the program in Title 27, Chapter 7 of the Mississippi Code. It would establish eligibility standards for recipient nonprofits, application and certification procedures through the Department of Revenue, a statewide annual cap of $500,000 for each credit category, and a five-year carryforward for unused credits. The bill would affect individual taxpayers, business taxpayers, and qualifying disability-service nonprofits, while reducing state income tax collections to the extent credits are claimed.
No committee discussion or vote history was provided, so the available record does not show formal legislative sentiment. From the bill text, the measure appears generally supportive of charitable giving to disability-related nonprofits and likely intended to be presented as a targeted tax incentive. At the same time, the narrow eligibility rules and abortion-related certification requirement suggest the bill could draw both policy and ideological scrutiny.
The main points of contention likely involve the bill’s narrow definition of qualifying charitable organizations, the exclusion of organizations funded through Medicaid or Medicare, and the requirement that organizations certify they do not provide or support abortions. Critics may view these provisions as overly restrictive or as inserting social policy conditions into the tax code, while supporters may argue they ensure donations go to specific disability-service providers. There may also be concern about the administrative complexity of certification, recertification, and credit allocation under the annual cap.