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House Bill 2085HR 2085

Mental Health Research Accelerator Act of 2025

Taxation

8 pages

house
senate
president

Introduced March 11, 2025 by Michael Thompson · Last progress March 11, 2025

Bill Summary

Summary

Creates a new nonrefundable translational research tax credit equal to 25% of qualifying expenses for translational research on neurodegenerative diseases and psychiatric conditions. The credit is subject to annual national caps, can be transferred by certain tax-exempt entities to project partners, must be coordinated with the existing R&D credit rules, and sunsets after taxable years beginning after December 31, 2035.

Key Points

Creates a 25% nonrefundable tax credit for qualifying translational research on neurodegenerative and psychiatric conditions.
Sets annual national aggregate credit caps ($1B for 2026, $2B for 2027–2030, $1B for 2031) with carryforward of unused amounts.
Treasury, in consultation with HHS, FDA, and NIH, will issue regulations and run an allocation process prioritizing scientific merit and CNS-focused projects.
Allows tax-exempt entities (governments and 501(c)(3)s) to elect to transfer credits to eligible project partners.
Prevents double counting with the existing section 41 R&D credit for the same expenses in the same year, but allows those expenses to count in section 41 base-period calculations later.
Disallows deductions for expenses equal to the claimed credit and adds the new credit to the general business credit framework.
All changes take effect on enactment and the credit sunsets after taxable years beginning after Dec 31, 2035.
Credit is nonrefundable, so available tax liability and transfer rules will affect who can fully use the benefit.
Allocation and IP-sharing priorities may steer collaborations and project selection toward partnerships involving tax-exempt research entities.

Pros & Cons

The bill creates sizable, predictable tax incentives to accelerate CNS and psychiatric translational research—potentially speeding new therapies to patients and encouraging collaboration—while costing taxpayers significant revenue and creating access, administrative, and tax-planning limits for some small or non-taxable research entities.

Potential Benefits

4

Patients with neurodegenerative and psychiatric conditions may get faster access to new treatments because the bill prioritizes and funds translational research across the full development continuum for high-need CNS and psychiatric projects.
Scientists, hospitals, and companies developing CNS and psychiatric treatments receive a 25% tax credit on qualifying translational research costs, reducing net R&D expenses and strengthening incentives to pursue new therapies.
Researchers and institutions benefit from predictable multi-year federal support because the bill sets large aggregate annual caps ($1B–$2B) through 2031, aiding planning for multi-year translational projects.

Potential Drawbacks

4

All American taxpayers face reduced federal revenue because the program forgoes $1B–$2B annually, which could increase deficits or pressure other spending or taxes.
Startups and small nonprofits without tax liability may receive little direct benefit because the credit is nonrefundable unless they can transfer credits to partners, limiting support for early-stage innovators.
Scientists, small research entities, and nonprofits may face delays and extra administrative burden because complex allocation and transfer rules, Treasury regulations, and application processes could slow access to credits.

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Categories & Tags

Agencies

Treasury

HHS

FDA

NIH

Subjects

Tax Credits & Deductions

Procedural Corrections

Affected Groups

Scientists & Researchers

Hospitals & Health Systems

Schools & Universities

Nonprofits

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Sponsors (7)