I 
119TH CONGRESS 
1ST SESSION H. R. 4933 
To amend the Internal Revenue Code of 1986 to expand eligibility and 
increase simplification of the research credit for certain small businesses. 
IN THE HOUSE OF REPRESENTATIVES 
AUGUST 8, 2025 
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 
eligibility and increase simplification of the research cred-
it 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 2025’’. 
SEC. 2. EXPANSION OF REFUNDABLE RESEARCH CREDIT 
FOR NEW AND SMALL BUSINESSES. 
(a) ADJUSTMENT FOR INFLATION.—Paragraph (4) 
of section 41(h) of such Code is amended— 
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(1) by redesignating subparagraph (C) as sub-
paragraph (D), 
(2) by redesignating clause (ii) of subparagraph 
(B) as subparagraph (C), and by moving such sub-
paragraph 2 ems to the left, 
(3) by striking ‘‘LIMITATIONS’’ in the heading 
of subparagraph (B) and inserting ‘‘LIMITATION ON 
AMOUNT OF ELECTION’’, 
(4) by striking ‘‘AMOUNT’’ in the heading of 
clause (i) of subparagraph (B) and inserting ‘‘IN 
GENERAL’’, and 
(5) by adding at the end of subparagraph (B), 
as amended by the preceding subparagraphs of this 
paragraph, the following new clause: 
‘‘(ii) ADJUSTMENT FOR INFLATION.— 
In the case of a taxable year beginning 
after 2026, the dollar amounts in clause (i) 
shall be increased by an amount equal to— 
‘‘(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-
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stituting ‘2025’ 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.’’. 
(b) CREDIT REFUNDABLE AGAINST UNEMPLOYMENT 
TAXES.— 
(1) IN GENERAL.—Section 3111(f)(1)(B) of the 
Internal Revenue Code of 1986 is amended by strik-
ing ‘‘subsection (b)’’ and inserting ‘‘subsection (b) 
and section 3301’’. 
(2) CONFORMING AMENDMENTS.— 
(A) Paragraph (2) of section 3111(f) of 
such Code is amended by striking ‘‘the tax im-
posed by subsection (b)’’ and inserting ‘‘the 
sum of the taxes imposed by Comprehensive 
Legislation Ensuring Accountability and Re-
sponsiveness Act of 2025, 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 
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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) QUALIFIED SMALL BUSINESS DEFINITION EX-
PANDED.—Section 41(h)(3)(A) of such Code is amend-
ed— 
(1) in clause (i)(I), by striking ‘‘$5,000,000’’ 
and inserting ‘‘$10,000,000’’, 
(2) by amending clause (i)(II) to read as fol-
lows: 
‘‘(II) such entity did not have 
gross receipts (as so determined) ex-
ceeding an aggregate of $25,000 for 
any taxable year preceding the 10-tax-
able-year period ending with such tax-
able year, and’’, and 
(3) by adding at the end the following flush 
sentence: 
‘‘For purposes of the preceding sentence, gross receipts 
shall be determined under the rules of section 448(c)(3) 
without regard to subparagraph (A) thereof, except that 
such term shall not include any contributions to the cap-
ital of a corporation (other than contributions by a share-
holder) or any amount described in section 118(b) (other 
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than receipts from customers in exchange for goods or 
services).’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2025. 
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: 
‘‘(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’. 
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‘‘(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-
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, 2025. 
Æ 
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