I 
116TH CONGRESS 
1ST SESSION H. R. 5520 
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 19, 2019 
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 2019’’. 
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 
VerDate Sep 11 2014 
19:08 Dec 29, 2019
Jkt 099200
PO 00000
Frm 00001
Fmt 6652
Sfmt 6201
E:\BILLS\H5520.IH
H5520
pamtmann on DSKBC07HB2PROD with BILLS
is amended by striking ‘‘$250,000’’ and inserting 
‘‘$500,000’’. 
(2) ADJUSTMENT FOR INFLATION.—Paragraph 
(4) of section 41(h) of such Code is amended— 
(A) by redesignating subparagraph (C) as 
subparagraph (D), 
(B) by redesignating clause (ii) of subpara-
graph (B) as subparagraph (C), and by moving 
such subparagraph 2 ems to the left, 
(C) by striking ‘‘LIMITATIONS’’ in the 
heading of subparagraph (B) and inserting 
‘‘LIMITATION ON AMOUNT OF ELECTION’’, 
(D) by striking ‘‘AMOUNT’’ in the heading 
of clause (i) of subparagraph (B) and inserting 
‘‘IN GENERAL’’, and 
(E) by adding at the end of subparagraph 
(B), as amended by the preceding subpara-
graphs of this paragraph, the following new 
clause: 
‘‘(ii) ADJUSTMENT FOR INFLATION.— 
In the case of a taxable year beginning 
after 2020, the $500,000 amount in clause 
(i) shall be increased by an amount equal 
to— 
VerDate Sep 11 2014 
19:08 Dec 29, 2019
Jkt 099200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6201
E:\BILLS\H5520.IH
H5520
pamtmann on DSKBC07HB2PROD with BILLS
‘‘(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 ‘2019’ 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-
VerDate Sep 11 2014 
19:08 Dec 29, 2019
Jkt 099200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6201
E:\BILLS\H5520.IH
H5520
pamtmann on DSKBC07HB2PROD with BILLS
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, 2019. 
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: 
VerDate Sep 11 2014 
19:08 Dec 29, 2019
Jkt 099200
PO 00000
Frm 00004
Fmt 6652
Sfmt 6201
E:\BILLS\H5520.IH
H5520
pamtmann on DSKBC07HB2PROD with BILLS
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, 2019. 
Æ 
VerDate Sep 11 2014 
19:08 Dec 29, 2019
Jkt 099200
PO 00000
Frm 00006
Fmt 6652
Sfmt 6301
E:\BILLS\H5520.IH
H5520
pamtmann on DSKBC07HB2PROD with BILLS