Expanding refundable research credit for new and small businesses

(a) Increasing cap on refundable credit (1) In general Subclause (I) of section 41(h)(4)(B)(i) of the Internal Revenue Code of 1986 is amended by striking $250,000 and inserting the applicable amount. (2) Applicable amount Subclause (II) of section 41(h)(4)(B)(i) of such Code is amended to read as follows: (II) Applicable amount For purposes of subclause (I), the applicable amount is— (aa) in the case of any taxable year beginning after December 31, 2024, and before January 1, 2026, $500,000, (bb) in the case of any taxable year beginning after December 31, 2025, and before January 1, 2027, $525,000, (cc) in the case of any taxable year beginning after December 31, 2026, and before January 1, 2028, $550,000, (dd) in the case of any taxable year beginning after December 31, 2027, and before January 1, 2029, $575,000, (ee) in the case of any taxable year beginning after December 31, 2028, and before January 1, 2030, $600,000, (ff) in the case of any taxable year beginning after December 31, 2029, and before January 1, 2031, $625,000, (gg) in the case of any taxable year beginning after December 31, 2030, and before January 1, 2032, $650,000, (hh) in the case of any taxable year beginning after December 31, 2031, and before January 1, 2033, $675,000, (ii) in the case of any taxable year beginning after December 31, 2032, and before January 1, 2034, $700,000, (jj) in the case of any taxable year beginning after December 31, 2033, and before January 1, 2035, $725,000, and (kk) in the case of any taxable year beginning after December 31, 2034, $750,000.. (3) Conforming amendments (A) Clause (ii) of section 41(h)(5)(B) of such Code is amended by striking each of the $250,000 amounts and inserting the applicable amount. (B) Section 3111(f) of such Code is amended— (i) in paragraph (1)— (I) by striking (applied without regard to subclause (II) thereof), and and inserting a period, (II) by striking subparagraph (B), and (III) by striking for a taxable year and all that follows through allowed as a credit and inserting for a taxable year, there shall be allowed as a credit, (ii) in paragraph (2)— (I) by striking paragraph (1)(A) and inserting paragraph (1), and (II) by striking, and the credit allowed by paragraph (1)(B) shall not exceed the tax imposed by subsection (b) for any calendar quarter,, and (iii) in paragraph (4)— (I) by striking credits and inserting credit, and (II) by striking or (b). (b) Extension of eligibility and applicability of election (1) Startup date Subclause (II) of section 41(h)(3)(A)(i) of the Internal Revenue Code of 1986 is amended by striking 5-taxable-year period and inserting 8-taxable-year period. (2) Extension of limitation on election Clause (ii) of section 41(h)(4)(B) of such Code is amended by striking 5 or more and inserting 8 or more. (c) Gross receipts test Clause (i) of section 41(h)(3)(A) of the Internal Revenue Code of 1986 is amended— (1) by striking $5,000,000 in subclause (I) and inserting $15,000,000, and (2) by striking gross receipts in subclause (II) and inserting gross receipts in excess of $25,000. (d) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2024.