House Bill 1566

AN ACT TO PROVIDE A STATE INCOME TAX CREDIT FOR CERTAIN HOUSEHOLD AND DEPENDENT CARE SERVICE EXPENSES NECESSARY FOR EMPLOYMENT WHICH ARE CLAIMED BY A TAXPAYER AS A FEDERAL DEPENDENT CARE INCOME TAX CREDIT; AND FOR RELATED PURPOSES.

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

SECTION 1. (1) Any taxpayer allowed to claim a federal income tax credit under 26 USCS Section 21 for household and dependent care service expenses necessary for gainful employment, shall be allowed a refundable credit against the taxes imposed under this chapter in the manner prescribed in this section, regardless of whether the taxpayer claimed the federal credit. The amount of the credit shall be as follows:

(a) One hundred percent (100%) of the allowable federal credit if the taxpayer's state adjusted gross income is less than Twenty-five Thousand Dollars ($25,000.00);

(b) Eighty percent (80%) of the allowable federal credit if the taxpayer's state adjusted gross income is at least Twenty-five Thousand Dollars ($25,000.00) but less than Thirty-five Thousand Dollars ($35,000.00);

(c) Sixty percent (60%) of the allowable federal credit if the taxpayer's state adjusted gross income is at least Thirty-five Thousand Dollars ($35,000.00) but less than Forty-five Thousand Dollars ($45,000.00);

(d) Forty percent (40%) of the allowable federal credit if the taxpayer's state adjusted gross income is at least Forty-five Thousand Dollars ($45,000.00) but less than Fifty-five Thousand Dollars ($55,000.00);

(e) Twenty percent (20%) of the allowable federal credit if the taxpayer's state adjusted gross income is at least Fifty-five Thousand Dollars ($55,000.00) but less than Sixty-five Thousand Dollars ($65,000.00).

(2) If the amount of credit claimed by a taxpayer exceeds the amount of income tax imposed upon the taxpayer for the taxable year reduced by the sum of all other credits allowable to the taxpayer under the state income tax laws, except credit for tax payments made by or on behalf of the taxpayer, then the taxpayer shall receive a refund from the State Tax Commission for the amount of such excess.

SECTION 2. Section 1 of this act shall be codified as a separate code section in Chapter 7, Title 27, Mississippi Code of 1972.

SECTION 3. Nothing in this act shall affect or defeat any claim, assessment, appeal, suit, right or cause of action for taxes due or accrued under the income tax laws before the date on which this act becomes effective, whether such claims, assessments, appeals, suits or actions have been begun before the date on which this act becomes effective or are begun thereafter; and the provisions of the income tax laws are expressly continued in full force, effect and operation for the purpose of the assessment, collection and enrollment of liens for any taxes due or accrued and the execution of any warrant under such laws before the date on which this act becomes effective, and for the imposition of any penalties, forfeitures or claims for failure to comply with such laws.

SECTION 4. This act shall take effect and be in force from and after January 1, 2007.