Senate Bill 2439

AN ACT TO CREATE THE "CHILDCARE ADVANCE ACT" TO PROVIDE AN INCOME TAX DEFERRAL FOR PARENTS INCURRING CHILDCARE EXPENSES; AND FOR RELATED PURPOSES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. (1) This section shall be known and may be cited as the "Childcare Advance Act."

(2) This section amends the tax law to establish a "childcare advance" which enables certain taxpayers to defer payment of a portion of their tax liability.

(3) (a) Any resident taxpayer who, in a taxable year, has employment-related expenses for childcare for a dependent under age five (5) may defer payment of his or her tax liability for that taxable year by the amount of those expenses, not to exceed Two Thousand Dollars ($2,000.00).

(b) Any taxpayer who defers tax liability under paragraph (a) of this subsection shall be liable, once the taxpayer is no longer taking the deferral, for the full amount previously deferred, divided into equal payments over ten (10) years; however, in any future years the taxpayer takes the deferral, he or she shall be liable only for one-tenth (1/10) of each deferral taken five (5) or more years prior until each of those deferrals is repaid. At no point shall the taxpayer be liable for amounts previously repaid. Repayment shall be made without interest.

(c) At the end of every tax year, the Department of Revenue shall notify each taxpayer who has deferred tax liability under paragraph (a) of this subsection of the total amount of his or her deferred liability, the tax year in which repayment will begin, and an estimate of the amount for which the taxpayer will be liable each year once the eligibility expires.

(d) Nothing in this section shall prevent a taxpayer from repaying accumulated liability earlier than the schedule set forth in paragraph (b) of this subsection, or from taking less than the total amount allowable under paragraph (a) of this subsection, in any given tax year.

(e) Any taxpayer who moves to a jurisdiction that does not maintain tax reciprocity with this state shall be liable for the entire amount deferred on the tax filing for the tax year in which such change of residence occurs; however, subject to approval by the Department of Revenue, he or she shall be permitted to repay that liability through a payment plan approved by the department.

(f) The Department of Revenue shall provide for the repayment of deferrals under this section to be made through payroll withholding and shall address repayment in cases of divorce.

SECTION 2. This act shall take effect and be in force from and after January 1, 2021.