,i #aacth ,,congress #b;d ,session ,h4 ,r4 #dfif ,,in ,,the ,,house ,,of ,,representatives ,may #ba1 #bjad ,mr4 ,gerlach 7for himself1 ,mr4 ,kind1 ,mr4 ,kelly of ,pennsylvania1 and ,mr4 ,peters of ,michigan7 introduced the following bill2 which was referred to the ,committee on ,ways and ,means ,a ,,bill ,to amend the ,internal ,revenue ,code of #aihf to provide for startup businesses to use a portion of the research and development credit to offset payroll taxes4 #a4 ,short title ,this ,act may be cited as the ,startup ,innovation ,credit ,act of #bjad4 #b4 ,treatment of research credit for certain startup companies 7a7 ,in general ,section #da of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new subsection3 7i7 ,treatment of credit for qualified small businesses 7#a7 ,in general ,at the election of a qualified small business for any taxable year1 section #caaa7;f7 shall apply to the payroll tax credit portion of the credit otherwise determined under subsection 7a7 for the taxable year and such portion shall not be treated 7other than for purposes of section #bhj;,c7 as a credit determined under subsection 7a74 7#b7 ,payroll tax credit portion ,for purposes of this subsection1 the payroll tax credit portion of the credit determined under subsection 7a7 with respect to any qualified small business for any taxable year is the least of-- 7,a7 the amount specified in the election made under this subsection1 7,b7 the credit determined under subsection 7a7 for the taxable year 7determined before the application of this subsection71 or 7,c7 in the case of a qualified small business other than a partnership or ,s corporation1 the amount of the business credit carryforward under section #ci carried from the taxable year 7determined before the application of this subsection to the taxable year74 7#c7 ,qualified small business ,for purposes of this subsection-- 7,a7 ,in general ,the term qualified small business means1 with respect to any taxable year-- 7i7 a corporation or partnership1 if-- 7,i7 the gross receipts 7as determined under the rules of section #ddh7;c77#c71 without regard to subparagraph 7,a7 thereof7 of such entity for the taxable year is less than #e1jjj1jjj1 and 7,,ii7 such entity did not have gross receipts 7as so determined7 for any taxable year preceding the #e-taxable-year period ending with such taxable year1 and 7ii7 any person 7other than a corporation or partnership7 who meets the requirements of subclauses 7,i7 and 7,,ii7 of clause 7i71 determined-- 7,i7 by substituting person for entity each place it appears1 and 7,,ii7 by only taking into account the aggregate gross receipts received by such person in carrying on all trades or businesses of such person4 7,b7 ,limitation ,such term shall not include an organization which is exempt from taxation under section #eja4 7#d7 ,election 7,a7 ,in general ,any election under this subsection for any taxable year-- 7i7 shall specify the amount of the credit to which such election applies1 7ii7 shall be made on or before the due date 7including extensions7 of-- 7,i7 in the case of a qualified small business which is a partnership1 the return required to be filed under section #fjca1 7,,ii7 in the case of a qualified small business which is an ,s corporation1 the return required to be filed under section #fjcg1 and 7,,iii7 in the case of any other qualified small business1 the return of tax for the taxable year1 and 7iii7 may be revoked only with the consent of the ,secretary4 7,b7 ,limitations 7i7 ,amount ,the amount specified in any election made under this subsection shall not exceed #bej1jjj4 7ii7 ,number of taxable years ,a person may not make an election under this subsection if such person 7or any other person treated as a single taxpayer with such person under paragraph 7#e77;,a77 has made an election under this subsection for #e or more preceding taxable years4 7,c7 ,special rule for partnerships and ,s corporations ,in the case of a qualified small business which is a partnership or ,s corporation1 the election made under this subsection shall be made at the entity level4 7#e7 ,aggregation rules 7,a7 ,in general ,except as provided in subparagraph 7,b71 all persons or entities treated as a single taxpayer under subsection 7f77#a7 shall be treated as a single taxpayer for purposes of this subsection4 7,b7 ,special rules ,for purposes of this subsection and section #caaa7;f7-- 7i7 each of the persons treated as a single taxpayer under subparagraph 7,a7 may separately make the election under paragraph 7#a7 for any taxable year1 and 7ii7 the #bej1jjj amount under paragraph 7#d77;,b77i7 shall be allocated among all persons treated as a single taxpayer under subparagraph 7,a7 in the same manner as under subparagraph 7,a77ii7 or 7,b77ii7 of subsection 7f77#a71 whichever is applicable4 7#f7 ,regulations ,the ,secretary shall prescribe such regulations as may be necessary to carry out the purposes of this subsection1 including-- 7,a7 regulations to prevent the avoidance of the purposes of the limitations and aggregation rules under this subsection through the use of successor companies or other means1 7,b7 regulations to minimize compliance and recordkeeping burdens under this subsection1 and 7,c7 regulations for recapturing the benefit of credits determined under section #caaa7;f7 in cases where there is a subsequent adjustment to the payroll tax credit portion of the credit determined under subsection 7a71 including requiring amended income tax returns in the cases where there is such an adjustment4 4 7b7 ,credit allowed against ,,fica taxes ,section #caaa of such ,code is amended by adding at the end the following new subsection3 7f7 ,credit for research expenditures of qualified small businesses 7#a7 ,in general ,in the case of a taxpayer who has made an election under section #da7;i7 for a taxable year1 there shall be allowed as a credit against the tax imposed by subsection 7a7 for the first calendar quarter which begins after the date on which the taxpayer files the return specified in section #da7;i77#d77;,a77ii7 an amount equal to the payroll tax credit portion determined under section #da7;i77#b74 7#b7 ,limitation ,the credit allowed by paragraph 7#a7 shall not exceed the tax imposed by subsection 7a7 for any calendar quarter on the wages paid with respect to the employment of all individuals in the employ of the employer4 7#c7 ,carryover of unused credit ,if the amount of the credit under paragraph 7#a7 exceeds the limitation of paragraph 7#b7 for any calendar quarter1 such excess shall be carried to the succeeding calendar quarter and allowed as a credit under paragraph 7#a7 for such quarter4 7#d7 ,deduction allowed for credited amounts ,the credit allowed under paragraph 7#a7 shall not be taken into account for purposes of determining the amount of any deduction allowed under chapter #a for taxes imposed under subsection 7a74 4 7c7 ,effective date ,the amendments made by this section shall apply to credits determined for taxable years beginning after ,december #ca1 #bjac4