House Bill 4039
Revise Employer and Dependent Care Income Tax Credit
Modifies the income tax credit for employers providing childcare stipends to $3,000 per year per child and creates a...
- Committees: Ways and Means
- Author: John Thomas Lamar, III
- Session: 2026
On March 4th, HB 4039 was referred to the Senate Finance Committee.
Explanation of the Bill
House Bill 4039 amends Section 57-73-23 of the Mississippi Code to revise the employer-provided child care tax credit. The bill caps the credit at up to $3,000 per year per child and adjusts the required stipend amount employers must provide to a minimum of $2,000 in order to qualify. Previously, employers had to provide a stipend valued at a minimum of $6,000.
House Bill 4039 clears up existing statute to ensure that stipends are used to support licensed or registered childcare programs. The committee substitute adds language that would allow other agencies or organizations that accredit childcare programs to also be eligible to participate in the tax credit program, though it does not specify the other agencies or organizations.
Additionally, House Bill 4039 creates a rebate program that would allow employers to receive a cash rebate for up to 75% of the tax credit amount. The total amount of credits available statewide would be capped at $5 million per tax year, and individual employers could not claim more than $50,000 in a single tax year. The committee substitute adds an overall cap for the tax credit, which would allow up to $5M in tax credits per tax year.
If enacted, House Bill 4039 would make it more affordable for employers to provide a childcare stipend to their employees. At the same time, capping the credit at $3,000 per child and limiting the overall credit to $5M may limit the financial impact for employers and families. The overall effect will also depend on employer uptake and the cost of child care in different regions of the state. The rebate program may also allow smaller businesses to take advantage of the childcare tax credit program by providing them with access to cash.
Two similar bills, Senate Bill 2867 and House Bill 4058 are also making their way through the legislative process.
Updates to the Bill
On February 23, HB 4039 was referred to the House Ways and Means committee.
On February 24, the House Ways and Means Committee passed HB 4039 with a committee substitute.
On February 25, HB 4039 passed the House with a committee substitute.
On March 4th, HB 4039 was referred to the Senate Finance Committee.