(a) In general Section 3302(c) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph: (4) Credits of small businesses not reduced by reason of unrepaid advances (A) In general Paragraph (2) shall not apply with respect to any specified small business. (B) Specified small business For purposes of this paragraph, the term specified small business means any taxpayer if such taxpayer employs fewer than 500 employees as of the close of the third quarter of the calendar year immediately preceding the second consecutive January 1 referred to in paragraph (2)(A)(i).. (b) Effective date The amendment made by this section shall apply to taxable years beginning after the date of the enactment of this Act.