Children’s Promise Act
History
The Children’s Promise Act is legislation passed during the 2018 session allowing businesses to receive a dollar-for-dollar tax credit for up to 50% of their state tax liability by making a voluntary cash contribution to an approved nonprofit entity. The nonprofit entities who qualified during this first year were a very narrow portion of the nonprofit sector. In 2019, the scope of approved nonprofits was widened to allow educational institutions to apply; Presbyterian Day School – Kosciusko, is now approved to receive contributions through the Children’s Promise Act as a Qualified Charitable Organization.
There is a statewide cap on the amount that will be approved by the Department of Revenue so the program operates on a first-come, first-serve basis starting each January. Once the statewide cap is reached, no more applications will be approved for the remainder of the calendar year. The 2021 statewide cap was reached on January 1st, 2021 so it is a very well sought after program.
Please review the section below to learn more about taking advantage of this program.
*Information provided on this page is not tax advice. Please consult a tax professional regarding your specific tax situation.
How It Works
An income tax credit is available to any business who commits to a voluntary cash contributions of up to 50% of their state tax liability to an eligible charitable organization. The tax credit only available to a taxpayer who is a business enterprise engaged in commercial, industrial or professional activities and operating as a corporation, limited liability company, partnerships, or sole proprietorship. The credit is allowed against income tax, insurance premium tax, and insurance premium retaliatory tax. A contribution, for which an Eligible Charitable Business Contribution Tax Credit is claimed, may not be used as a deduction by the taxpayer for state income tax purposes.
Business taxpayers may donate and receive a dollar-for-dollar tax credit for up to 50% of a taxpayer’s Mississippi State tax liability. For pass-through entities, each partner, member or shareholder may offset up to 50% of his/her individual Mississippi tax liability if the credit is sufficient.
You may only claim a tax credit for your charitable contribution on your Mississippi state tax return. You cannot claim both a deduction and a credit for the same charitable contribution on your Mississippi tax return. Charitable Tax Credit dollars may be carried forward for up to five years, reducing future tax liability.
Steps To Participate
The taxpayer must submit a request for approval for the tax credit from the Department of Revenue using the purple button below. The taxpayer must indicate the dollar amount of the contribution made or to be made to the approved nonprofit (Presbyterian Day School –Kosciusko).
Within thirty (30) days of receiving the form, the Mississippi Department of Revenue shall respond with an approval or denial.
If the Mississippi Department of Revenue approves an application, the taxpayer must make the contribution and send the verification of the contribution to the Mississippi Department of Revenue within sixty (60) days from the date the approval was granted.
If the contribution is not made within sixty (60) days, the tax credit allocation will be cancelled by the Mississippi Department of Revenue and those funds will be available for other applicants to utilize.
If you would like more information or assistance in applying, please contact the PDS administration office.