MISSISSIPPI LEGISLATURE
2025 Regular Session
To: Ways and Means
By: Representative Lamar
AN ACT TO AUTHORIZE AN INCOME TAX CREDIT TO QUALIFIED EMPLOYERS THAT OFFER AN INDIVIDUAL COVERAGE HEALTH REIMBURSEMENT ARRANGEMENT; TO PROVIDE THE AMOUNT OF THE TAX CREDIT; TO PROVIDE THE REPORTING REQUIREMENTS WITH THE DEPARTMENT OF REVENUE THAT THE QUALIFIED EMPLOYER SHALL COMPLY WITH; TO PROVIDE THE LIMIT ON THE TAX CREDIT FOR EACH FISCAL YEAR; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. (1) For purposes of this section, the following words and phrases shall have the meanings as provided in this section unless the context clearly indicates otherwise:
(a) "Qualified employer" means an employer that:
(i) Has fewer than fifty (50) employees;
(ii) Is subject to state tax liability under Chapter 7, Title 27, Mississippi Code of 1972;
(iii) Offers an Individual Coverage Health Reimbursement Arrangement (ICHRA) as described in Section 9831(d) of the Internal Revenue Code in lieu of a traditional employer-provided health insurance plan.
(b) "State tax liability" means the total tax liability incurred under Chapter 7, Title 27, Mississippi Code of 1972.
(c) "Covered employee" means an employee for whom the qualified employer provides a contribution to an ICHRA.
(2) (a) For the first taxable year in which a qualified employer offers an ICHRA:
(i) The employer may claim a tax credit of up to Four Hundred Dollars ($400.00) per covered employee if the employer's contribution to the ICHRA equals or exceeds either:
1. The level of benefits provided in the prior benefit year; or
2. The amount contributed per covered individual to the employer's previous health insurance plan during the prior benefit year.
(b) For the second taxable year in which a qualified employer continues to offer an ICHRA, the employer may claim a tax credit of up to Two Hundred Dollars ($200.00) per covered employee.
(3) A qualified employer that claims a credit under this act must report to the Department of Revenue every three (3) years after claiming the credit. The report shall include:
(a) Whether the employer continued to offer the ICHRA or reverted to a traditional employer-sponsored plan; and
(b) Details regarding the level of benefits provided under the ICHRA.
(4) (a) The total amount of tax credits approved under this section shall not exceed Ten Million Dollars ($10,000,000.00) in any fiscal year.
(b) The Department of Revenue shall approve claims in the chronological order of filing until the limit on the amount of credits that may be approved in a fiscal year is reached.
(c) A tax credit under this section may not exceed the employer's state tax liability for the taxable year. Excess credits may be carried forward for ten (10) years from the close of the taxable year in which the credits were earned.
(5) (a) A qualified employer must claim the credit on their annual state tax return in the manner prescribed by the Department of Revenue.
(b) The employer shall provide all necessary documentation to verify eligibility for the credit.
(6) The Department of Revenue shall adopt rules necessary to implement and administer this act.
SECTION 2. Section 1 of this act shall be codified as a new section in Chapter 7, Title 27, Mississippi Code of 1972.
SECTION 3. This act shall take effect and be in force from and after January 1, 2026.