Mental Health Research Accelerator Act of 2025
Mental Health Research Accelerator Act of 2025 would create a new 25% tax credit for translational research expenses specifically targeting neurodegenerative diseases and psychiatric conditions. The credit would be claimed against the general business credit (Sec. 38) and would be subject to an annual nationwide cap that scales up from $1 billion in 2026 to $2 billion for 2027–2030, then back to $1 billion in 2031, with carryover provisions if the cap isn’t fully allocated. The bill sets up a competitive, merit-based allocation process run by the Secretary of the Treasury in coordination with health agencies (HHS, FDA, NIH) and allows eligible tax-exempt entities (e.g., universities, charities) to transfer the credit to eligible project partners. Projects are to cover all phases of the research continuum, emphasize new therapeutics/devices for CNS disorders, include repurposing standards, and encourage public-private partnerships and IP sharing. The credit would sunset after December 31, 2035, and the bill includes rules to coordinate this credit with existing R&D credits (with some offsetting restrictions) and to disallow deductions for the portion of expenses covered by the credit. Effective date is on enactment.
Key Points
- 1New translational research credit: 25% of amounts paid or incurred for translational research related to neurodegenerative diseases and psychiatric conditions.
- 2National allocation cap and timing: Annual caps begin at $1B (2026), rise to $2B (2027–2030), then $1B (2031); the Secretary allocates these among applicants, with carryovers if not fully used.
- 3Allocation criteria and process: Regulations will be issued detailing application, merit-based selection, inclusion of all research phases, emphasis on CNS therapeutics/devices, repurposing standards, and public-private partnership IP-sharing rules.
- 4Transferability: The credit can be allocated to eligible project partners (not just the tax-exempt entity), with specific definitions and rules for how the transfer works, especially in partnerships.
- 5Interaction with other tax incentives: Generally, expenses counted for this credit cannot be used to claim the Section 41 R&D credit, with certain inclusions for base period calculations; the portion of expenses equal to the credit cannot be deducted under Section 280C(i).
- 6Credit as part of the general business credit: The new credit is incorporated into the general business credit pool.
- 7Sunset and scope: The credit ends for taxable years beginning after December 31, 2035; effective date is upon enactment.