H.R. 7766

116TH CONGRESS
2D SESSION

H.R. 7766

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

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.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 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, 2020.