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HB 1771

removing the prospective repeal of child care staffing ratios and the associated waiver system and requiring the department of health and human services to provide certain notice regarding availability of the waiver.

2026 Regular Session Introduced by Katy Peternel

Protects taxpayers from penalties or interest when an income tax balance is solely due to a tax credit being denied for lack of funds or cap, if they pay or arrange payment within

Signed by Governor Ayotte 05/28/2026; Chapter 98; eff.07/27/2026
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WeVote Research Nonpartisan
Bill Summary · HB 1771

Summary — HB 1771 (tax credit denial / notice before penalties) — income tax credit denials

Note: Multiple unrelated bills filed as "HB 1771" in different states are present in the provided materials (Arkansas insurance disclosure language; Illinois housing authority language; Mississippi appropriation amendment). This summary focuses on the income-tax provision that matches the title “Establishes notice requirements of tax credit denials before penalties are issued” — the new Missouri-style section (proposed section 143.512) that addresses tax-credit limit denials and penalties for income tax balances.

Purpose

To protect taxpayers from being assessed interest, penalties, or additions to tax when an otherwise-eligible taxpayer owes an income-tax balance solely because a tax credit they qualified for was fully or partially denied due to the credit program running out of funds or reaching a statutory cap.

Key provisions

  • Creates a new statutory section (proposed 143.512) governing treatment of income-tax balances that arise solely from a "tax credit limit denial."
  • If a tax-credit limit denial is the sole reason a taxpayer has an income-tax balance for a tax year:
    • The taxpayer will not be liable for any addition to tax, penalty, or interest on that portion of the balance, provided the taxpayer either:
    • pays the balance, or
    • enters into Department of Revenue–approved payment arrangements, within 60 days of the initial notice to the taxpayer that the tax credit was fully or partially denied.
    • If the taxpayer fails to comply with the approved payment arrangement in any respect, normal penalty/interest rules apply retroactively (i.e., the taxpayer becomes liable for additions as if the protective rule did not exist).
  • Defines “tax credit limit denial” to mean the full or partial denial of authorization/approval/issuance/redemption of a tax credit to a taxpayer who otherwise fully qualified — the denial must be due to insufficient funds/appropriations or because the cumulative statutory maximum for that credit has been claimed or issued for the relevant fiscal/calendar year.
  • Applicability cutoff: the section applies only to income tax balances that arise on or after August 28, 2026.

Who is affected

  • Primary: individual and business income taxpayers who otherwise qualify for a tax credit but are denied (in whole or part) because the credit program is out of funds or has hit a statutory cap.
  • Secondary: the state Department of Revenue (administration of notices, payment-arrangement approvals, accounting), and state cash flow/revenue timing (potential short-term changes to collections).
  • The provision is limited: it applies only when the credit denial is the sole cause of the tax balance due.

Procedural/timeline aspects / status

  • The provision includes an explicit effective/applicability date: applies to balances arising on or after August 28, 2026.
  • The materials show the measure as introduced and contain mixed legislative-activity records from multiple jurisdictions. For the Missouri-text provision, the bill was introduced in the House (103rd General Assembly) — confirm current Missouri legislative status with the official state legislative site for up-to-date action.

Potential impacts and considerations

  • Taxpayer relief: taxpayers who qualified for credits but were denied due to program caps avoid penalties/interest if they act within the 60-day window, reducing unfair penalty exposure.
  • Administrative burden: the Department of Revenue must (a) timely issue notices explaining the denial, (b) accept and approve payment arrangements, and (c) track compliance within 60 days.
  • Fiscal impact: possible timing effects on state revenue collections (deferral of penalties/interest), though net revenue impact depends on how many taxpayers use the protection and on repayment behavior; no fiscal estimate provided in the text.
  • Anti-abuse / scope limits: protection does not apply if the tax-credit denial was for reasons other than funding/cap limits, nor does it apply if the denial was not the sole cause of the tax balance; taxpayers who default on approved arrangements lose the protection.

Notes

  • If you need a summary tied to one of the other HB 1771 drafts (Arkansas insurance disclosure changes; Illinois housing voucher reimbursement; Mississippi appropriation amendments), say which state/version you want and I will provide a separate concise summary.

Compiled from official sources — confirm details with the bill’s official record.

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