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I
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 Representa-
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tives of the United States of America in Congress assembled,
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SECTION 1. INCREASE IN RESEARCH CREDIT AND BETTER
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ACCESS TO CREDIT FOR STARTUPS.
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(a) CREDIT RATE INCREASE.—
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(1) IN GENERAL.—Section 41(a) of the Internal
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Revenue Code of 1986 is amended by striking ‘‘20
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percent’’ and inserting ‘‘40 percent’’.
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•HR 7766 IH
(2) ALTERNATIVE
SIMPLIFIED
CREDIT.—Sec-
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tion 41(c)(4)(A) of such Code is amended by strik-
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ing ‘‘14 percent’’ and inserting ‘‘28 percent’’.
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(3) CREDIT RATE IN CASE OF NO RESEARCH
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EXPENSES
IN
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PRECEDING
YEARS.—Section
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41(c)(4)(B)(ii) of such Code is amended by striking
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‘‘6 percent’’ and inserting ‘‘1⁄2 the credit percentage
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in effect under subparagraph (A)’’.
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(b) MODIFICATION OF SMALL BUSINESS PORTION
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ALLOWED AGAINST PAYROLL TAX.—
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(1) INCREASE
IN
LIMITATION.—Paragraphs
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(4)(B)(i) and (5)(B)(ii) of section 41(h) of such
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Code are each amended by striking ‘‘$250,000’’ and
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inserting ‘‘$500,000’’.
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(2) QUALIFIED
SMALL
BUSINESS
GROSS
RE-
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CEIPTS
THRESHOLD.—Section 41(h)(3)(A)(i)(I) of
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such Code is amended by striking ‘‘$5,000,000’’ and
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inserting ‘‘the dollar amount in effect for the taxable
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year under section 448(c)(1)’’.
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(c) EFFECTIVE DATES.—
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(1) SUBSECTION (a).—The amendments made
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by subsection (a) shall apply to taxable years begin-
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ning after December 31, 2020.
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•HR 7766 IH
(2) SUBSECTION (b).—The amendments made
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by subsection (b) shall apply to taxable years begin-
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ning after December 31, 2019.
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