To amend the Internal Revenue Code of 1986 to increase the research tax credit and provide better access to the credit for business startups.

Bill: 116-hr-7766
Sponsor: full_name: Rep. Walorski, Jackie [R-IN-2]
Introduced: 2020-07-23
Policy area: Taxation
Subjects: Business expenses

Income tax credits

Research and development

Small business
Latest action: action_date: 2020-07-23
text: Referred to the Subcommittee on Select Revenue Measures.

Summaries:
action_date: 2020-07-23
action_desc: Introduced in House
text: <p>This bill increases from 20% to 40% the rate of the tax credit for increasing research activities. It also increases the rate of the alternative simplified research credit and the credit rate where there have been no research expenses for the preceding three years. </p> <p>The bill also increases the amount of research expenses for purposes of calculating the payroll tax credit allowed to certain small businesses. </p>

tv_txt: I 116th CONGRESS 2d Session H. R. 7766 IN THE HOUSE OF REPRESENTATIVES July 23, 2020 Mrs. Walorski (for herself and Mr. Arrington ) 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 increase the research tax credit and provide better access to the credit for business startups.

1. Increase in research credit and better access to credit for startups (a) Credit rate increase (1) In general Section 41(a) of the Internal Revenue Code of 1986 is amended by striking 20 percent and inserting 40 percent . (2) Alternative simplified credit Section 41(c)(4)(A) of such Code is amended by striking 14 percent and inserting 28 percent . (3) Credit rate in case of no research expenses in 3 preceding years Section 41(c)(4)(B)(ii) of such Code is amended by striking 6 percent and inserting 1/2 the credit percentage in effect under subparagraph (A) . (b) Modification of small business portion allowed against payroll tax (1) Increase in limitation Paragraphs (4)(B)(i) and (5)(B)(ii) of section 41(h) of such Code are each amended by striking $250,000 and inserting $500,000 . (2) Qualified small business gross receipts threshold Section 41(h)(3)(A)(i)(I) of such Code is amended by striking $5,000,000 and inserting the dollar amount in effect for the taxable year under section 448(c)(1) . (c) Effective dates (1) Subsection (a) The amendments made by subsection (a) shall apply to taxable years beginning after December 31, 2020. (2) Subsection (b) The amendments made by subsection (b) shall apply to taxable years beginning after December 31, 2019.