Sponsors (8)
The bill creates a targeted, multi‑year tax credit stream to encourage translational CNS research and enable nonprofits to monetize support, but it limits and phases the benefit—partially offsets credit value, restricts who receives credits via competitive allocations, and expires after 2035—introducing uncertainty for some researchers and long-term projects.
Researchers, small biotech companies, and hospitals conducting translational research on neurodegenerative and psychiatric (CNS) conditions can claim a 25% tax credit on eligible expenses, lowering their after-tax research costs.
The program allocates up to $2 billion per year (2027–2030) in aggregate credits, giving priority CNS research projects multi-year funding predictability and expanding available public support for translational work.
Nonprofit and government research entities can transfer credits to project partners, allowing tax-exempt organizations to monetize research support through eligible private partners and attract additional collaborators.
Because credits are limited by annual and per-taxpayer allocations and awarded through a competitive process, some eligible researchers and smaller firms may go unfunded, creating uncertainty and uneven access to support.
Taxpayers claiming this credit cannot also claim the section 41 R&D credit on the same expenses, reducing the total tax relief available for some research projects compared with current options.
The credit reduces deductions under section 280C for the portion of expenses equal to the credit, which increases taxable income and partially offsets the value of the credit for recipients.
Based on analysis of 2 sections of legislative text.
Creates a 25% translational research tax credit for neurodegenerative and psychiatric research with annual national caps, transferability for some nonprofits, and a sunset after 2035.
Introduced March 11, 2025 by Michael Thompson · Last progress March 11, 2025
Creates a new 25% tax credit for qualifying translational research spending tied to neurodegenerative diseases and psychiatric conditions, subject to annual national and per-taxpayer limits and program rules. The Treasury Secretary, after consulting HHS, FDA, and NIH, will allocate available credit amounts each year, issue regulations, and allow certain tax-exempt entities to transfer credits to eligible project partners; the program has set annual national caps through 2031 and expires for tax years beginning after December 31, 2035.