II 

114TH CONGRESS 

1ST SESSION S. 455 

To amend the Internal Revenue Code of 1986 to provide for special treatment 

of the research credit for certain startup companies, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

FEBRUARY 11, 2015 

Mr. ROBERTS (for himself, Mr. COONS, and Mr. SCHUMER) introduced the 

following bill; which was read twice and referred to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to provide 

for special treatment of the research credit for certain 

startup companies, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Innovators Job Cre5 ation Act of 2015’’. 

6 SEC. 2. TREATMENT OF RESEARCH CREDIT FOR CERTAIN 

7 STARTUP COMPANIES. 

8 (a) IN GENERAL.—Section 41 of the Internal Rev9 enue Code of 1986 is amended by adding at the end the 

10 following new subsection: 


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1 ‘‘(i) TREATMENT OF CREDIT FOR QUALIFIED SMALL

2 BUSINESSES.— 

3 ‘‘(1) IN GENERAL.—At the election of a quali4 fied small business for any taxable year, section 

5 3111(f) shall apply to the payroll tax credit portion 

6 of the credit otherwise determined under subsection 

7 (a) for the taxable year and such portion shall not 

8 be treated (other than for purposes of section 280C) 

9 as a credit determined under subsection (a). 

10 ‘‘(2) PAYROLL TAX CREDIT PORTION.—For 

11 purposes of this subsection, the payroll tax credit 

12 portion of the credit determined under subsection 

13 (a) with respect to any qualified small business for 

14 any taxable year is the least of— 

15 ‘‘(A) the amount specified in the election 

16 made under this subsection, 

17 ‘‘(B) the credit determined under sub18 section (a) for the taxable year (determined be19 fore the application of this subsection), or 

20 ‘‘(C) in the case of a qualified small busi21 ness other than a partnership or S corporation, 

22 the amount of the business credit carryforward 

23 under section 39 carried from the taxable year 

24 (determined before the application of this sub25 section to the taxable year). 


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1 ‘‘(3) QUALIFIED SMALL BUSINESS.—For pur2 poses of this subsection— 

3 ‘‘(A) IN GENERAL.—The term ‘qualified 

4 small business’ means, with respect to any tax5 able year— 

6 ‘‘(i) a corporation or partnership, if— 

7 ‘‘(I) the gross receipts (as deter8 mined under the rules of section 

9 448(c)(3), without regard to subpara10 graph (A) thereof) of such entity for 

11 the taxable year is less than 

12 $5,000,000, and 

13 ‘‘(II) such entity did not have 

14 gross receipts (as so determined) for 

15 any taxable year preceding the 5-tax16 able-year period ending with such tax17 able year, and 

18 ‘‘(ii) any person (other than a cor19 poration or partnership) who meets the re20 quirements of subclauses (I) and (II) of 

21 clause (i), determined— 

22 ‘‘(I) by substituting ‘person’ for 

23 ‘entity’ each place it appears, and 

24 ‘‘(II) by only taking into account 

25 the aggregate gross receipts received 


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1 by such person in carrying on all 

2 trades or businesses of such person. 

3 ‘‘(B) LIMITATION.—Such term shall not 

4 include an organization which is exempt from 

5 taxation under section 501. 

6 ‘‘(4) ELECTION.— 

7 ‘‘(A) IN GENERAL.—Any election under 

8 this subsection for any taxable year— 

9 ‘‘(i) shall specify the amount of the 

10 credit to which such election applies, 

11 ‘‘(ii) shall be made on or before the 

12 due date (including extensions) of— 

13 ‘‘(I) in the case of a qualified 

14 small business which is a partnership, 

15 the return required to be filed under 

16 section 6031, 

17 ‘‘(II) in the case of a qualified 

18 small business which is an S corpora19 tion, the return required to be filed 

20 under section 6037, and 

21 ‘‘(III) in the case of any other 

22 qualified small business, the return of 

23 tax for the taxable year, and 

24 ‘‘(iii) may be revoked only with the 

25 consent of the Secretary. 


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1 ‘‘(B) LIMITATIONS.— 

2 ‘‘(i) AMOUNT.—The amount specified 

3 in any election made under this subsection 

4 shall not exceed $250,000. 

5 ‘‘(ii) NUMBER OF TAXABLE YEARS.— 

6 A person may not make an election under 

7 this subsection if such person (or any other 

8 person treated as a single taxpayer with 

9 such person under paragraph (5)(A)) has 

10 made an election under this subsection for 

11 5 or more preceding taxable years. 

12 ‘‘(C) SPECIAL RULE FOR PARTNERSHIPS

13 AND S CORPORATIONS.—In the case of a quali14 fied small business which is a partnership or S 

15 corporation, the election made under this sub16 section shall be made at the entity level. 

17 ‘‘(5) AGGREGATION RULES.— 

18 ‘‘(A) IN GENERAL.—Except as provided in 

19 subparagraph (B), all persons or entities treat20 ed as a single taxpayer under subsection (f)(1) 

21 shall be treated as a single taxpayer for pur22 poses of this subsection. 

23 ‘‘(B) SPECIAL RULES.—For purposes of 

24 this subsection and section 3111(f)— 


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1 ‘‘(i) each of the persons treated as a 

2 single taxpayer under subparagraph (A) 

3 may separately make the election under 

4 paragraph (1) for any taxable year, and 

5 ‘‘(ii) the $250,000 amount under 

6 paragraph (4)(B)(i) shall be allocated 

7 among all persons treated as a single tax8 payer under subparagraph (A) in the same 

9 manner as under subparagraph (A)(ii) or 

10 (B)(ii) of subsection (f)(1), whichever is 

11 applicable. 

12 ‘‘(6) REGULATIONS.—The Secretary shall pre13 scribe such regulations as may be necessary to carry 

14 out the purposes of this subsection, including— 

15 ‘‘(A) regulations to prevent the avoidance 

16 of the purposes of the limitations and aggrega17 tion rules under this subsection through the use 

18 of successor companies or other means, 

19 ‘‘(B) regulations to minimize compliance 

20 and record-keeping burdens under this sub21 section, and 

22 ‘‘(C) regulations for recapturing the ben23 efit of credits determined under section 3111(f) 

24 in cases where there is a subsequent adjustment 

25 to the payroll tax credit portion of the credit 


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1 determined under subsection (a), including re2 quiring amended income tax returns in the 

3 cases where there is such an adjustment.’’. 

4 (b) CREDIT ALLOWED AGAINST FICA TAXES.—Sec5 tion 3111 of the Internal Revenue Code of 1986 is amend6 ed by adding at the end the following new subsection: 

7 ‘‘(f) CREDIT FOR RESEARCH EXPENDITURES OF

8 QUALIFIED SMALL BUSINESSES.— 

9 ‘‘(1) IN GENERAL.—In the case of a taxpayer 

10 who has made an election under section 41(i) for a 

11 taxable year, there shall be allowed as a credit 

12 against the tax imposed by subsection (a) for the 

13 first calendar quarter which begins after the date on 

14 which the taxpayer files the return specified in sec15 tion 41(i)(4)(A)(ii) an amount equal to the payroll 

16 tax credit portion determined under section 41(i)(2). 

17 ‘‘(2) LIMITATION.—The credit allowed by para18 graph (1) shall not exceed the tax imposed by sub19 section (a) for any calendar quarter on the wages 

20 paid with respect to the employment of all individ21 uals in the employ of the employer. 

22 ‘‘(3) CARRYOVER OF UNUSED CREDIT.—If the 

23 amount of the credit under paragraph (1) exceeds 

24 the limitation of paragraph (2) for any calendar 

25 quarter, such excess shall be carried to the sucVerDate Sep 11 2014 22:00 Feb 18, 2015 Jkt 049200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S455.IS S455

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1 ceeding calendar quarter and allowed as a credit 

2 under paragraph (1) for such quarter. 

3 ‘‘(4) DEDUCTION ALLOWED FOR CREDITED

4 AMOUNTS.—The credit allowed under paragraph (1) 

5 shall not be taken into account for purposes of de6 termining the amount of any deduction allowed 

7 under chapter 1 for taxes imposed under subsection 

8 (a).’’. 

9 (c) EFFECTIVE DATE.—The amendments made by 

10 this section shall apply to credits determined for taxable 

11 years beginning after December 31, 2014. 

12 SEC. 3. RESEARCH CREDIT ALLOWED AGAINST ALTER13 NATIVE MINIMUM TAX. 

14 (a) IN GENERAL.—Subparagraph (B) of section 

15 38(c)(4) of the Internal Revenue Code of 1986 is amend16 ed— 

17 (1) by redesignating clauses (ii), (iii), (iv), (v), 

18 (vi), (vii), (viii), and (ix) as clauses (iii), (iv), (v), 

19 (vi), (vii), (viii), (ix), and (x), respectively, and 

20 (2) by inserting after clause (i) the following 

21 new clause: 

22 ‘‘(ii) the credit determined under sec23 tion 41 with respect to an eligible small 

24 business (as defined in paragraph (5)(C), 


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1 after application of rules similar to the 

2 rules of paragraph (5)(D)),’’. 

3 (b) EFFECTIVE DATE.—The amendments made by 

4 this section shall apply to credits determined for taxable 

5 years beginning after December 31, 2014, and to 

6 carrybacks of such credits. 

Æ 


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