Jackson, Miss. – April, 2026 – The Mississippi Early Learning Alliance (MELA) released a new white paper on Wednesday focused on making the state’s newly updated Child Care Business Tax Credit (CCBTC) more accessible and practical for employers to use. The release comes as Mississippi’s business community, early childhood leaders, and policymakers celebrate recent legislative updates shaped through strong cross-sector collaboration—changes designed to better align the credit with employers’ financial realities. Even with the new, necessary updates, the credit seems to remain complex for businesses to navigate alone. MELA’s recommendations highlight the need to build awareness and advance solutions—such as a centralized third-party administrator—to reduce administrative burden and ensure more employers can realistically participate.
Why it matters:
Momentum is building in Mississippi to address child care as a workforce issue. During the 2026 legislative session, lawmakers, including Senator Nicole Boyd and Representative Donnie Bell, introduced bills aimed at improving the usability of the existing Child Care Business Tax Credit. This tax credit is designed to allow businesses to offset the cost of child care for their employees and receive a tax credit for a portion of the funds spent. This week, Governor Tate Reeves signed Senate Bill 2867 into law, making key revisions to the credit to support implementation. Primarily, the revisions reduce the amount that must be spent by a company from $6,000 to $2,000 among other changes.
These updates reflect meaningful collaboration between the business community, early childhood advocates, and state leaders to ensure the policy is workable within employer budgets and responsive to the needs of working families.
Meanwhile, others are also exploring how public-private partnerships can support child care. A new report from the Social Science Research Center (SSRC) highlights shared-cost child care as a workforce strategy that is being increasingly explored by other states. That report can be viewed here.
At the same time, child care providers across the state are navigating a fragile financial landscape. Many programs are operating on thin margins, facing rising costs, workforce shortages, and the lingering effects of pandemic-era funding changes. Without sustainable and scalable solutions, these pressures continue to threaten the stability of the child care supply that employers and families rely on.
Despite growing policy interest and recent important improvements, the Child Care Business Tax Credit is likely to remain underutilized—not due to lack of employer interest, or sticker price, but because of the administrative complexity required to participate.
“Mississippi leaders are clearly recognizing child care as a workforce issue, and we’re encouraged by the momentum and collaboration across sectors,” said Luci Leffler, Manager of Advocacy and Policy at MELA. “With the recent updates making the tax credit more affordable and realistic for employers, this is the right moment to share our recommendations. Even with those improvements, it may still be hard for businesses to use. This report lays out practical implementation recommendations to reduce that burden so the policy can actually deliver for families, employers, and the child care providers our workforce depends on.”
Report overview:
The recommendation report, Cost Sharing Can Work: Scaling and Supporting Employer-Based Child Care Benefits for Mississippi, examines how the state’s existing tax credit can be more effectively used to support employees. While the CCBTC covers 50 percent of eligible employer child care expenses, many employers—particularly small and mid-sized businesses—face practical barriers to participation.
To address this, the report recommends establishing a centralized third-party administrator (TPA) to manage enrollment, payments, and compliance. This approach would reduce administrative burden, simplify participation for employers, and help ensure more consistent and reliable funding flows to child care providers.
Evidence from other states supports this model. For example, Michigan’s Tri-Share Child Care Program saw significant increases in employer and employee participation after implementing centralized administration.
“The legislature and Governor have taken an important step to make it more affordable for businesses to support employees with child care costs,” said Biz Harris, Executive Director of MELA. “As this policy moves into practice, there are opportunities to ensure it’s as easy as possible for employers to use. Like many workplace benefits, this kind of support is most effective when administrative pieces—like paperwork, compliance, and payments—are streamlined. We’re excited to see partners, including HR firms, help make the process simple and accessible for businesses and families.”
The full white paper is available here.
ABOUT Mississippi Early Learning Alliance:
MELA exists to build, strengthen, and support coalitions to advocate for systems change to improve early learning and child development outcomes in our state. We champion shared policies, promote innovative and evidence-based practices, and support the collaborative design of solutions and collective action. We also elevate the voices and experiences of individuals who work in the field of early care and education and parents of Mississippi children most impacted by racial and economic inequality. For more information, visit www.msearlylearning.org and follow @MSEarlyLearning on Facebook and @MSEarlyLearningAlliance on Instagram.