Senate Bill 2475: Additional Early Learning Collaborative Act Tax Credits

February 22, 2024April 1, 2024 Bill Tracker

Latest Action

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On March 27, SB 2475 died in committee.

Explanation of the Bill

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Background

Early Learning Collaboratives (ELCs) are high-quality, state-funded four-year-old pre-K programs that are required to have at least two partners, one school district and one Head Start, but they may also have private or parochial schools or licensed child care centers as partners. The State of Mississippi provides half of the operating budget for ELCs. The other half is provided by local matching funds.  

To help ELCs meet their local match, the original Early Learning Collaborative Act of 2013 created a unique 1:1 tax credit. Individuals or corporations can donate up to $1 million. For every dollar donated, a dollar is removed from the donor’s tax liability. It is not a refundable tax credit. 

Senate Bill 2475 creates two new tax credits to benefit ELCs and families whose children attend pre-K at an ELC. Any Mississippi taxpayer whose child attends an ELC AND incurs childcare expenses paid to an ELC provider would be eligible to receive a state tax credit for an amount equal to the amount paid to the provider. This would largely benefit families whose children attend a childcare center. 

The second tax credit would benefit providers in an ELC. A provider would be eligible to receive a state tax credit in the amount of $1,500 multiplied by the average monthly number of children attending the program. Though the tax credit is unlikely to benefit schools or Head Starts as they do not pay the same types of taxes as for-profit businesses, this tax credit would greatly aid for-profit childcare providers who operate on slim profit margins and traditionally encounter additional barriers to joining an ELC.