Income tax; authorize credit for certain employers providing individual coverage health reimbursement arrangement (ICHRA) to employees., the official text

MISSISSIPPI LEGISLATURE

2026 Regular Session

To: Ways and Means

By: Representative Lamar

House Bill 343

(As Sent to Governor)

AN ACT TO AUTHORIZE AN INCOME TAX CREDIT FOR CERTAIN
EMPLOYERS THAT OFFER AN INDIVIDUAL COVERAGE HEALTH REIMBURSEMENT ARRANGEMENT IN
LIEU OF A TRADITIONAL EMPLOYER-PROVIDED HEALTH INSURANCE PLAN; TO PROVIDE THE
AMOUNT OF THE TAX CREDIT; TO PROVIDE THE REPORTING REQUIREMENTS WITH THE
DEPARTMENT OF REVENUE; AND FOR RELATED PURPOSES.

BE IT ENACTED BY THE
LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1.  (1)  For
purposes of this section, the following words and phrases shall have the
meanings as provided in this subsection unless the context clearly indicates
otherwise:

(a)  "Covered
employee" means an employee for whom the qualified employer provides a
contribution to an ICHRA.

(b)
"Department" means the Department of Revenue.

(c)  "ICHRA"
means an Individual Coverage Health Reimbursement Arrangement (ICHRA) as
described in Section 9831(d) of the Internal Revenue Code.

(d)  "Qualified
employer" means an employer that:

(i)  Has fewer than
fifty (50) employees;

(ii)  Is subject to
tax liability under this chapter; and

(iii)  Offers an
ICHRA in lieu of a traditional employer-provided health
insurance plan.

(2)  (a)  For the first
taxable year in which a qualified employer offers an ICHRA, the employer may
claim a credit of up to Four Hundred Dollars ($400.00) per covered employee
against the taxes imposed by this chapter, if the employer's contribution to the
ICHRA equals or exceeds either:

(i)  The level of
benefits provided in the prior benefit year; or

(ii)  The amount
contributed per covered individual to the employer's previous health insurance
plan during the prior benefit year.

(b)  For the second
taxable year in which a qualified employer continues to offer an ICHRA, the
employer may claim a tax credit of up to Two Hundred Dollars ($200.00) per
covered employee against the taxes imposed by this chapter.

(3)  A qualified employer
that claims a credit under this section must report to the department every
three (3) years after claiming the credit.  The report shall include:

(a)  Whether the
employer continued to offer the ICHRA or reverted to a traditional employer-sponsored
plan; and

(b)  Details regarding
the level of benefits provided under the ICHRA.

(4)  (a)  The total amount
of tax credits approved under this section shall not exceed One Million Dollars
($1,000,000.00) in any fiscal year.

(b)  The department
shall approve claims for credits in the chronological order of filing until the
limit on the amount of credits that may be approved in a fiscal year is
reached.

(c)  A tax credit under
this section may not exceed the employer's tax liability under this chapter for
the taxable year.  Excess credits may be carried forward for ten (10) years
from the close of the taxable year in which the credits were earned.

(5)  (a)  A qualified
employer must claim the credit on their annual state tax return in the manner
prescribed by the department.

(b)  The employer shall
provide all necessary documentation to verify eligibility for the credit.

(6)  The department shall
adopt rules necessary to implement and administer this section.

SECTION 2.  Section 1
of this act shall be codified as a new section in Chapter 7, Title 27,
Mississippi Code of 1972.

SECTION 3.  Nothing
in this act shall affect or defeat any claim, assessment, appeal, suit, right
or cause of action for taxes due or accrued under the income tax laws before
the date on which this act becomes effective, whether such claims, assessments,
appeals, suits or actions have been begun before the date on which this act
becomes effective or are begun thereafter; and the provisions of the income tax
laws are expressly continued in full force, effect and operation for the
purpose of the assessment, collection and enrollment of liens for any taxes due
or accrued and the execution of any warrant under such laws before the date on
which this act becomes effective, and for the imposition of any penalties,
forfeitures or claims for failure to comply with such laws.

SECTION 4.  This act
shall take effect and be in force from and after January 1, 2026.