Sponsors (8)
This bill creates a targeted 25% tax credit and multiyear allocation to spur translational CNS research and public–private collaboration, but includes allocation limits, tax-offset rules, and a 2035 sunset that reduce net benefits and leave funding uncertainty for some projects.
Researchers, small biotech companies, and hospitals conducting translational research on neurodegenerative and psychiatric conditions can claim a 25% tax credit on eligible expenses, substantially lowering their after-tax R&D costs for qualifying projects.
Eligible projects receive access to a multi-year allocation pool (up to $2 billion per year from 2027–2030), giving researchers and funders greater predictability and more concentrated public support for priority CNS translational projects.
Nonprofit and government research entities can transfer credits to project partners, allowing tax-exempt organizations and hospitals to monetize research support through eligible private partners and attract more collaborative funding.
Researchers, hospitals, and companies face a sunset of the program after 2035, creating a funding cliff and planning uncertainty for long-term, multi-decade translational research programs.
Annual and per-taxpayer allocation limits plus a competitive allocation process mean some eligible projects—particularly from smaller firms or less-established groups—may not receive credits, leaving promising research unfunded and increasing uncertainty for applicants.
Taxpayers cannot claim the existing section 41 R&D credit on the same expenses, reducing the total tax relief some research projects would otherwise receive and potentially lowering the net incentive for certain investments.
Based on analysis of 2 sections of legislative text.
Creates a 25% translational research tax credit for neurodegenerative and psychiatric research with multi‑year national caps and a 2035 sunset.
Official title: To amend the Internal Revenue Code of 1986 to provide for a credit against tax for expenses for translational research regarding neurodegenerative diseases and psychiatric conditions.
Introduced March 11, 2025 by Michael Thompson · Last progress March 11, 2025
Creates a new 25% translational research tax credit to support development-stage research on neurodegenerative diseases and psychiatric conditions. The credit has per-taxpayer and national annual limits, a multi-year aggregate funding schedule through 2031, administrative rules set by Treasury in consultation with HHS, FDA, and NIH, and expires for tax years after 2035. Allows certain tax-exempt entities to transfer credits to eligible project partners, prevents double-dipping with the existing section 41 research credit, and treats the credit as part of the general business credit. The Treasury must allocate available credits each year and issue implementing regulations and program criteria.