I 
117TH CONGRESS 
1ST SESSION H. R. 6344 
To amend the Internal Revenue Code of 1986 to expand refundability and 
increase simplification of the research credit for certain small businesses. 
IN THE HOUSE OF REPRESENTATIVES 
DECEMBER 23, 2021 
Mr. NEGUSE introduced the following bill; which was referred to the 
Committee on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to expand 
refundability and increase simplification of the research 
credit for certain small businesses. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Research and Develop-
ment Tax Credit Expansion Act of 2021’’. 
SEC. 2. EXPANSION OF REFUNDABLE RESEARCH CREDIT 
FOR NEW AND SMALL BUSINESSES. 
(a) DOUBLING CAP ON REFUNDABLE CREDIT.— 
(1) 
IN
GENERAL.—Clause 
(i) 
of 
section 
41(h)(4)(B) of the Internal Revenue Code of 1986 
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‘‘(I) such dollar amount, multi-
plied by 
‘‘(II) the cost-of-living adjust-
ment determined under section 1(f)(3) 
for the calendar year in which the tax-
able year begins, determined by sub-
stituting ‘2021’ for ‘2016’ in subpara-
graph (A)(ii) thereof. 
If any increase under the preceding sen-
tence is not a multiple of $100, such in-
crease shall be rounded to the nearest mul-
tiple of $100.’’. 
(3) CONFORMING AMENDMENT.—Clause (ii) of 
section 41(h)(5)(B) of such Code is amended by 
striking ‘‘the $250,000 amount’’ and inserting ‘‘the 
amount in effect’’. 
(b) CREDIT REFUNDABLE AGAINST MEDICARE AND 
UNEMPLOYMENT TAXES.— 
(1) IN
GENERAL.—Paragraph (1) of section 
3111(f) of the Internal Revenue Code of 1986 is 
amended by striking ‘‘subsection (a)’’ and inserting 
‘‘subsections (a) and (b) and section 3301’’. 
(2) CONFORMING AMENDMENTS.— 
(A) Paragraph (2) of section 3111(f) of 
such Code is amended by striking ‘‘the tax im-
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posed by subsection (a)’’ and inserting ‘‘the 
sum of the taxes imposed by subsection (a), 
subsection (b), and section 3301’’. 
(B) Section 3302 of such Code is amended 
by adding at the end the following new sub-
section: 
‘‘(i) CREDIT
FOR RESEARCH EXPENDITURES
OF 
QUALIFIED SMALL BUSINESSES.—Any portion of the 
credit under section 3111(f) which is credited under such 
section to the tax under section 3301 shall be treated as 
a credit under this section. Subsection (c) shall not apply 
to any such credit.’’. 
(c) DOUBLING
ELIGIBILITY
THRESHOLD.—Sub-
clause (I) of section 41(h)(3)(A)(i) of the Internal Rev-
enue Code of 1986 is amended by striking ‘‘$5,000,000’’ 
and inserting ‘‘$10,000,000’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2021. 
SEC. 3. MODIFICATIONS TO ALTERNATIVE SIMPLIFIED 
CREDIT FOR NEW AND SMALL BUSINESSES. 
(a) IN GENERAL.—Paragraph (4) of section 41(c) of 
the Internal Revenue Code of 1986 is amended by adding 
at the end the following new subparagraph: 
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‘‘(D) SPECIAL
RULES
FOR
QUALIFIED 
SMALL BUSINESSES.—In the case of a qualified 
small business (as defined in subsection 
(h)(3))— 
‘‘(i) CREDIT
RATE.—Subparagraph 
(A) shall be applied by substituting ‘20 
percent’ for ‘14 percent’. 
‘‘(ii) SPECIAL RULE FOR 1ST YEAR OF 
QUALIFIED RESEARCH EXPENSES.—If the 
taxpayer has no qualified research ex-
penses in any taxable year preceding the 
taxable year for which the credit is being 
determined, subparagraph (B)(ii) shall be 
applied by substituting ‘20 percent’ for ‘6 
percent’. 
‘‘(iii) SPECIAL
RULE
FOR
OTHER 
YEARS.—If the taxpayer is not described in 
clause (ii) for the taxable year, and sub-
paragraph (B) applies to such taxpayer for 
such year, at the election of the taxpayer— 
‘‘(I) subparagraph (B)(ii) shall 
be applied by substituting ‘10 percent’ 
for ‘6 percent’, or 
‘‘(II) subparagraph (B) shall not 
apply, and the average under subpara-
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graph (A) shall be determined by dis-
regarding any taxable year in the 3- 
year period described in such subpara-
graph in which there were no qualified 
research expenses.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2021. 
Æ 
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