U.S. Sen. Todd Young (R-IN) on Oct. 20 introduced a bipartisan bill that would enhance tax benefits for American research and development (R&D) activities.
Sen. Young signed on as the original cosponsor of the American Innovation and Jobs Act, S. 4822, with bill sponsor U.S. Sen. Maggie Hassan (D-NH) to support R&D investments by small businesses and startups, which Young called “the engines of job creation in the U.S.”
Such companies also “will be critical to our economic recovery as we emerge from the coronavirus pandemic,” said Sen. Young. “The American Innovation and Jobs Act will ensure we are doing our part by making the R&D credit as accessible and useful as possible so employers can focus on growing their business, while helping to create jobs and boost our economy at the same time.”
According to a one-page summary of the bill provided by Sen. Young’s office, an impending change to R&D deductions will reduce incentives to make long-term R&D investments, while current caps and restrictions on the refundable R&D tax credit limit its availability and usefulness for many new and small businesses.
“Both of these factors limit support for innovative companies and reduce job growth in R&D-intensive fields,” according to the summary.
If enacted, S. 4822 would restore immediate deductions of R&D investments and expand the refundable R&D tax credit for startups by raising the credit caps, changes that would increase incentives for new and established businesses to invest in R&D and create jobs, according to the summary.
“By expanding and strengthening R&D tax incentives, this bipartisan bill will help support startups, boost economic opportunity, and fuel American innovation,” said Sen. Hassan.
The bill, which is supported by both the National Association of Manufacturers and the R&D Coalition, has been referred for consideration to the U.S. Senate Finance Committee.