Sponsors (8)
The bill creates a targeted 25% translational research tax credit and incentives for public–private IP‑sharing partnerships to speed development of neurodegenerative and psychiatric therapies, but nonrefundable rules, caps, deduction disallowance, and administrative allocation limit benefits for smaller players and add implementation complexity.
Researchers, small biotech companies, and project sponsors receive a 25% tax credit for qualified translational research on neurodegenerative and psychiatric disorders, lowering project costs and incentivizing development of new therapies.
Hospitals, nonprofits, and industry partners that form public–private partnerships and share IP with tax‑exempt entities are prioritized for support, which can accelerate clinical development and increase the likelihood of wider patient access to resulting therapies.
Tax‑exempt entities can transfer credits to private project partners, enabling nonprofits and government research sponsors to leverage partners' tax capacity to fund projects and attract private investment into translational research.
Smaller firms, early‑stage projects, and entities with limited tax liability may receive little or no benefit because the credit is nonrefundable and subject to annual and per‑taxpayer caps.
Taxpayers who claim the credit cannot also claim the same expenses under the existing section 41 R&D credit for the same year, reducing flexibility for firms to maximize available tax incentives.
Disallowing deductions under section 280C for expenses equal to the credit effectively increases taxable income for claimants, partially offsetting the nominal value of the credit.
Based on analysis of 2 sections of legislative text.
Creates a 25% translational research tax credit for neurodegenerative and psychiatric research with yearly national caps and Treasury allocation rules through 2035.
Introduced March 11, 2025 by Michael Thompson · Last progress March 11, 2025
Creates a targeted tax credit to encourage translational research on neurodegenerative diseases and psychiatric conditions. The law adds a new nonrefundable tax credit equal to 25% of qualifying translational research expenses, sets yearly national funding caps through 2031 (and ends credits after 2035), and directs Treasury—consulting with HHS, FDA, and NIH—to allocate credits and write rules prioritizing scientific merit, full research continuum projects, CNS therapeutics/devices, repurposing, and public-private partnership/IP sharing. The credit includes special rules allowing certain tax-exempt organizations to transfer credits to project partners, prevents double counting with the existing section 41 research credit for the same expenses, and modifies tax accounting rules for deductions; unused annual aggregate amounts may carry to the next year.