Bill > HR4933

This bill, the Research and Development Tax Credit Expansion Act of 2025, aims to enhance research and development tax credits for small businesses by making several key modifications to the Internal Revenue Code. The bill expands the definition of a qualified small business by increasing the gross receipts threshold from $5 million to $10 million and modifying the calculation of gross receipts. It introduces an inflation adjustment for tax credit amounts beginning in 2026, ensuring that the dollar values keep pace with economic changes. The legislation also makes the research credit refundable against unemployment taxes, giving small businesses more flexibility in claiming the credit. Additionally, the bill increases the alternative simplified credit rate for qualified small businesses from 14% to 20% for businesses with no prior qualified research expenses, and provides an option for businesses with existing research expenses to either apply a 10% rate or disregard years with no research expenses when calculating the credit. These changes are designed to provide more financial support and incentives for small businesses investing in research and development, with the amendments set to take effect for taxable years beginning after December 31, 2025.

Budget and Finance

https://www.congress.gov/bill/119th-congress/house-bill/4933/all-info