Income tax; implement pilot program authorizing credit for educational expenses, awarded by lottery system.

SB 3118 creates a one-year pilot program (for 2026 only) allowing Mississippi parents or guardians to claim a state income tax credit for eligible K-12 educational expenses like private school tuition, textbooks, and school fees. The credit is capped at $2,500 per student annually, with unused portions carryable forward for five years, but the total credits awarded statewide cannot exceed $20 million in 2026. Eligibility is determined through a random lottery system administered by the state tax department, and the credit cannot exceed a taxpayer’s actual state income tax liability for the year. This program directly affects families paying for K-12 education outside public schools, offering potential tax savings through a limited, lottery-based system.