Mississippi House Bill HB721

Mississippi 2025 Regular Session

• Introduced: 1/15/25
• Refer: 1/15/25
• Failed: 2/26/25

Caption

Income tax; provide a credit for taxpayers who claim a federal earned income tax credit.

Impact

If enacted, HB 721 will amend Mississippi's income tax laws by introducing a new provision specifically allowing this state-level tax credit. By codifying this credit into law, it aims to enhance the financial support available to individuals already benefiting from the federal EITC, thereby boosting disposable income for an economically vulnerable segment of the population. This could lead to an increase in overall economic activity through heightened consumer spending among these households.

Summary

House Bill 721 introduces a state income tax credit for Mississippi taxpayers who qualify for the federal earned income tax credit (EITC) as outlined under 26 USCS Section 32. The bill stipulates that eligible taxpayers can claim a refundable credit amounting to five percent (5%) of their federal EITC. This move is designed to provide additional financial relief to low- to moderate-income families, as they can receive a state tax refund if the claimed tax credit exceeds their income tax liability for the tax year.

Contention

While the bill is positioned as a means to assist low-income families, there may be debates around its implementation and its financial implications on the state budget. Concerns may arise over potential revenue losses for the state due to the newly introduced tax credits, prompting discussions about fiscal responsibility and the continuous support for state programs reliant on tax revenue. Moreover, the efficacy of the credit in achieving its intended objectives will be closely monitored to ensure that it adequately addresses the needs of the target population.