H.R. 4933

119th CONGRESS 1st Session

To amend the Internal Revenue Code of 1986 to expand eligibility and increase simplification of the research credit for certain small businesses.

IN THE HOUSE OF REPRESENTATIVES · August 8, 2025 · Sponsor: Mr. Neguse · Committee: Committee on Ways and Means

Table of contents

• H.R. 4933
  • SEC. 1. Short title
  • SEC. 2. Expansion of refundable research credit for new and small businesses
  • SEC. 3. Modifications to alternative simplified credit for new and small businesses

SEC. 1. Short title

• This Act may be cited as the Research and Development Tax Credit Expansion Act of 2025.

SEC. 2. Expansion of refundable research credit for new and small businesses

• (a) Adjustment for inflation
  • Paragraph (4) of section 41(h) of such Code is amended—
    • by redesignating subparagraph (C) as subparagraph (D),
    • by redesignating clause (ii) of subparagraph (B) as subparagraph (C), and by moving such subparagraph 2 ems to the left,
    • by striking in the heading of subparagraph (B) and inserting ,
    • by striking in the heading of clause (i) of subparagraph (B) and inserting , and
      • (ii) In the case of a taxable year beginning after 2026, the dollar amounts in clause (i) shall be increased by an amount equal to—
      • such dollar amount, multiplied by
      • the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting for in subparagraph (A)(ii) thereof.
      • If any increase under the preceding sentence is not a multiple of $100, such increase shall be rounded to the nearest multiple of $100.
    • by adding at the end of subparagraph (B), as amended by the preceding subparagraphs of this paragraph, the following new clause:
• (b) Credit refundable against unemployment taxes
  • (1) In general
    • of the Internal Revenue Code of 1986 is amended by striking subsection (b)and inserting subsection (b) and section 3301. Section 3111(f)(1)(B)
  • (2) Conforming amendments
    • Paragraph (2) of section 3111(f) of such Code is amended by striking and inserting .
      • (i) Credit for research expenditures of qualified small businesses
        • Any portion of the credit under section 3111(f) which is credited under such section to the tax under section 3301 shall be treated as a credit under this section. Subsection (c) shall not apply to any such credit.
    • Section 3302 of such Code is amended by adding at the end the following new subsection:
• (c) Qualified small business definition expanded
  • Section 41(h)(3)(A) of such Code is amended—
    • in clause (i)(I), by striking $5,000,000and inserting inserting0,000,000,
    • by amending clause (i)(II) to read as follows:
    • by adding at the end the following flush sentence:
• (d) Effective date
  • The amendments made by this section shall apply to taxable years beginning after December 31, 2025.

SEC. 3. Modifications to alternative simplified credit for new and small businesses

• (a) In general
  • Paragraph (4) of of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph: section 41(c)
    • (D) Special rules for qualified small businesses
      • In the case of a qualified small business (as defined in subsection (h)(3))—
        • (i) Subparagraph (A) shall be applied by substituting for . 20 percent 14 percent
        • (ii) If the taxpayer has no qualified research expenses in any taxable year preceding the taxable year for which the credit is being determined, subparagraph (B)(ii) shall be applied by substituting for . 20 percent 6 percent
        • (iii) If the taxpayer is not described in clause (ii) for the taxable year, and subparagraph (B) applies to such taxpayer for such year, at the election of the taxpayer—
        • subparagraph (B)(ii) shall be applied by substituting for , or 10 percent 6 percent
        • subparagraph (B) shall not apply, and the average under subparagraph (A) shall be determined by disregarding any taxable year in the 3-year period described in such subparagraph in which there were no qualified research expenses.
• (b) Effective date
  • The amendment made by this section shall apply to taxable years beginning after December 31, 2025.