Increasing access to the research credit for startups

(a) In general Paragraph (4) of section 41(c) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph: (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 20 percent for 14 percent, and (ii) if subparagraph (B) applies to such taxpayer, at the election of the taxpayer— (I) subparagraph (B)(ii) shall be applied by substituting 10 percent for 6 percent, or (II) in lieu of applying subparagraph (B), 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 the date of the enactment of this Act.