Mississippi Children’s Promise Act Tax Credit

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How it Works

Your gift helps Palmer Home serve approximately 200 children each year. You can receive a dollar-for-dollar tax credit for up to 50% of your donation for Mississippi state tax liability.

 

How do I donate?

  • Step 1: Complete the MSDOR application for tax credit allocation. Within 30 days of receipt, MSDOR shall send notification of allocation.
  • Step 2: Make a donation to Palmer Home for Children at www.palmerhome.org/donate to reduce up to 50% of your Mississippi tax liability to help hope grow for children in our care.
  • Step 3: Send verification of the contribution to the MSDOR. Verification must be received within 60 days of receipt of notification of allocation.

 

Frequently Asked Questions

This information is not intended to give tax advice. Please consult with your tax professional about your specific tax questions.

Who is eligible to receive the Children’s Promise Act Tax Credit?

A tax credit is available for voluntary cash contributions to an eligible charitable organization. The tax credit is 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, partnership, or sole proprietorship.

The credit is allowed against income tax, insurance premium tax, and insurance premium retaliatory tax. A contribution to an eligible charitable organization used for the Eligible Charitable Business Contribution Tax Credit cannot be used for the Charitable Business Contribution Tax Credit or Foster Care Charitable Tax Credit.

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.

What is an Eligible Charitable Organization?

“Eligible Charitable Organization” means an organization that is exempt from federal income taxation under Section 501(c)(3) of the Internal Revenue Code and is:

  1. (i) Licensed by or under contract or agreement with the Department of Child Protection Services and provides services for:
    • The prevention and diversion of children from custody with the Department of Child Protection Services,
    • The safety, care and well-being of children in custody with the Department of Child Protection Services,
    • The express purpose of creating permanency for children through adoption; or
  2. (ii) Certified by the department as a job training, workforce development or educational services charitable organization and provides services to:
    • Children in a foster care placement program established by the Department of Child Protection Services, children placed under the Safe Families for Children model, or children at significant risk of entering a foster care placement program established by the Department of Child Protection Services,
    • Children who have a chronic illness or physical, intellectual, developmental or emotional disability, or
    • Children eligible for free or reduced price meals programs under Section 37-11-7.

Is Palmer Home for Children an Eligible Charitable Organization?

Yes. Palmer Home for Children is an Eligible Charitable Organization.

How do I apply for the Children’s Promise Act tax credit?

The taxpayer must apply for the tax credit on the forms prescribed by the Mississippi Department of Revenue.

  • In the application, the taxpayer must certify to the department the dollar amount of the contribution made or to be made during the calendar year.
  • Within thirty (30) days after receipt of the application, the Mississippi Department of Revenue shall allocate tax credits based on the dollar amount of the contribution as certified in the application.
  • Once the Mississippi Department of Revenue has allocated credits to a taxpayer, the taxpayer must make the contribution and send the verification of the contribution to the Mississippi Department of Revenue. Verification sent by the taxpayer to Mississippi Department of Revenue must be received within sixty (60) days from the date of the allocation notification.
  • If the contribution is not made within sixty (60) days, the allocation will be cancelled and returned to the Mississippi Department of Revenue for reallocation.

How much can I donate to Palmer Home for Children for the Children’s Promise Act?

  • There is no limit on the amount that can be contributed.
  • Business taxpayers may donate and receive a dollar-for-dollar tax credit for up to 50% of the 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.

Do I get a deduction AND a tax credit for donations to an Eligible Charitable Organization?

You may only claim a tax credit for your charitable contribution on your Mississippi state tax return if the organization you donated to is considered an Eligible Charitable Organization. You cannot claim both a deduction and a credit for the same charitable contribution on your Mississippi tax return.

Does this tax credit apply to my Federal tax return?

The Children’s Promise Act tax credit is only a dollar-for-dollar reduction on your Mississippi State taxes. Consult with your tax professional for questions about deductions on your Federal Return.

What is the period for making contributions?

  • The Mississippi Department of Revenue will allocate credits within a calendar year.
  • The tax credits authorized under the Children’s Promise Act are limited to $5,000,000 per calendar year.
  • The Children’s Promise Act allows for allocations each calendar year beginning January 1, 2019. The Mississippi Department of Revenue shall not allocate any credits after January 1, 2025.

What if I do not owe Mississippi state taxes?

Charitable Tax Credit dollars may be carried forward for up to five years, reducing future tax liability.

More Info

The Children’s Promise Act provides a limited amount of the tax credits per calendar year. For more information on how to apply for the Children’s Promise Act tax credit and to access the forms, visit www.dor.ms.gov. This information is not intended to give tax advice. Consult a tax professional regarding your specific tax situation.

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