Credits Available for Contributions to Eligible Charitable Organizations (ECO) & Educational Services Charitable Organizations (ESCO)

Information for ESCO Credits

Total Maximum Allocation: $9,000,000

Limits on Total Allocations per ESCO: 4.5% of the maximum allocation ($405,000)

Who can Qualify as an ESCO: Organizations that are accredited by a regional accrediting organization and that provide services to 1) Children in a foster care related programs established by the Department of Child Protection Services, 2) Children who have a chronic illness or physical, intellectual, developmental or emotional disability, or 3) Children eligible for free or reduced price meals programs

Who can Apply for an Allocation of Credit: Business Taxpayers (Corporations, Partnerships, Limited Liability Companies, and Sole Proprietorships)

Tax-Types that Credit can be used against: Income Tax (50% of tax liability), Insurance Premium Tax (50% of tax liability), Insurance Premium Retaliatory Tax (50% of tax liability), Ad Valorem Tax (for entities not operating as a corporation, 50% of real property tax liability)

Carry Forward: 5 years

Other Limitations: Contribution cannot be used for other state charitable credits and cannot be used as a deduction for state income tax purposes

How to Qualify as an Educational Services Charitable Organization

 

 

Steps to Qualify with the Department

To qualify as an ESCO, the organization must submit a letter ruling request to the Mississippi Department of Revenue including the following:

1. Contact information including phone number, email address, mailing address, and physical address, if different from mailing address.
2. A copy of the exemption letter from the IRS verifying that the organization qualifies under Section 501(c)(3) of the Internal Revenue Code.
3. A statement that the funds generated from the tax credit shall be used for educational resources, staff, and expenditures and/or other purposes described in Miss. Code Ann. Section 27-7-22.41.
4. The number of students served in Mississippi in each category, below:
   1. 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;
   2. Children who have a chronic illness or physical, intellectual, developmental, or emotional disability; and
   3. Children eligible for free or reduced-price meals programs under Miss. Code Ann. Section 37-11-7 or selected for participation in the Promise Neighborhoods Program sponsored by the U.S. Department of Education.
5. The total number of students currently served in Mississippi.
6. Documentation that the organization is accredited by a regional accrediting organization (RAO). A RAO is an independent nongovernmental organization that offers institution wide academic accreditation to schools and/or charitable organizations offering education in Mississippi, ensuring that they meet acceptable levels of quality. The organization must offer accreditation as an ongoing process, the initial earning of accreditation cannot guarantee indefinite accredited status. An accrediting organization that is not limited to a specific region or regions may qualify as a RAO if it has different educational requirements for different regions including Mississippi. Examples include but are not limited to the Mid-South Association of Independent Schools or the Southern Association of Colleges and Schools.
7. A list of services provided by the organization.
8. A statement that the organization does not provide, pay for, or provide coverage of abortions and does not financially support any other entity that provides, pays for, or provides coverage of abortions.
9. A statement, signed by an officer of the organization under penalty of perjury, that the organization meets all criteria to be considered an ESCO.

Educating children must be the primary goal of an ESCO.

An ESCO provides instruction, tutoring, or training delivered by teachers or instructors that explain, tell, demonstrate, supervise, and direct to help students learn. They may provide opportunities for academic enrichment activities during non-school hours or periods when school is not in session, such as before and after school or during summer recess. Services can be provided through diverse means including internet or other electronic and distance learning methods as well as sign language.

Providing scholarships, day-care, therapy, or treatment does not qualify as educational services.

Listing of Currently Qualified ESCOs

Listing of Qualified ESCOs