To amend the Internal Revenue Code of 1986 to make a portion of research credit refundable for certain small businesses engaging in specified medical research.

To amend the Internal Revenue Code of 1986 to make a portion of research credit refundable for certain small businesses engaging in specified medical research. 1. Refundable portion of research credit for small businesses engaging in specified medical research (a) In general Section 41 (i) Refundable portion for small businesses engaging in specified medical research (1) In general At the election of a medical research small business, the portion of the credit determined under this section for the taxable year which is properly allocable to specified medical research shall be treated (other than for purposes of section 280C) as a credit allowed under subpart C (and not this subpart). (2) Medical research small business For purposes of this subsection, the term medical research small business (A) which conducts any specified medical research during the taxable year, and (B) the gross receipts of which (determined under the rules of subsection (c)) for the taxable year do not exceed $1,000,000. (3) Specified medical research For purposes of this subsection, the term specified medical research (4) Election Any election under this subsection for any taxable year— (A) shall specify the amount of the credit to which such election applies, (B) shall be made on or before the due date (including extensions) of the return of tax for the taxable year, (C) may not be made for any taxable year with respect to any portion of the credit determined under this section with respect to which an election is made under subsection (h), and (D) may be revoked only with the consent of the Secretary. (5) Regulations The Secretary shall prescribe such regulations for purposes of this subsection as may be necessary or appropriate for determining proper allocation to specified medical research of the portion of any credit allowed to a taxpayer for a taxable year under this section. . (b) Conforming amendment Section 1324(b) of title 31, United States Code, is amended by inserting 41(i), 6428, (c) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2020.

Summary: This bill allows certain small businesses whose gross receipts do not exceed $1 million a refundable portion of the tax credit for increasing research activities if such businesses are engaging in specified medical research. It defines specified medical research as any qualified research with respect to qualified countermeasures. A qualified countermeasure is a drug, biological product, or device that is determined to be a priority (1) to diagnose, mitigate, prevent, or treat harm from any biological agent (including organisms that cause an infectious disease) or toxin, chemical, radiological, or nuclear agent that may cause a public health emergency affecting national security; (2) to diagnose, mitigate, prevent, or treat harm from a condition that may result in adverse health consequences or death and may be caused by administering a drug, biological product, or device; or (3) is a product or technology intended to enhance the use or effect of a drug, biological product, or device.