To amend the Internal Revenue Code of 1986 to exclude from gross income certain compensation to clinical trial participants, and for other purposes.
- Bill Number
- H.R. 4184
- Origin Chamber
- House
- Congress
- 119th Congress, Session 1
- Policy Area
- Taxation
- Status
- Introduced
- Latest Action
- 2025-06-26: Referred to the House Committee on Ways and Means.
- Last Updated
- 2025-07-17T19:02:43Z
AI-Generated Summary
Purpose of the Legislation
This bill aims to encourage participation in clinical trials by excluding certain payments received by participants from federal income taxes and ensuring these payments do not affect eligibility for federal benefits programs. It amends the Internal Revenue Code of 1986 (the main U.S. tax law) to provide tax relief and protect access to government assistance.
Key Provisions
- Tax Exclusion for Clinical Trial Payments:
- Adds a new section (139J) to the Internal Revenue Code, excluding "qualified clinical trial payments" from an individual's gross income (the total income subject to tax).
- Qualified clinical trial payment includes:
- Compensation for an individual's participation (or that of their dependent) in an approved clinical trial.
- Reimbursements for reasonable and necessary expenses related to such participation.
- Approved clinical trial is defined by referencing the Public Health Service Act (a federal health law), but expanded to cover trials for any disease or condition, not just life-threatening ones.
- Dependent follows the standard tax definition (e.g., a qualifying child or relative claimed on taxes).
- Applies to payments received after December 31, 2025.
- Protection from Benefits Eligibility Impacts:
- Regardless of other laws, qualified clinical trial payments are not counted as income or assets when determining eligibility for, or the amount of, benefits under federal programs (or state/local programs funded partly by federal money).
- This ensures participants do not lose access to aid due to trial-related payments.
Significant Changes to Existing Law
- Tax Code Amendment: Previously, payments for clinical trial participation could be treated as taxable income (e.g., as wages or miscellaneous income). This introduces a specific exclusion, similar to existing ones for disaster victims or certain medical expenses, but targeted at clinical trials.
- Benefits Eligibility Rule: Adds a new safeguard that overrides other laws, preventing these payments from reducing or disqualifying individuals from federal assistance programs. No prior blanket exclusion existed for clinical trial compensation in this context.
- Minor clerical update to the tax code's table of contents for the new section.
Potential Impacts
- On Citizens: Clinical trial participants (and their dependents) will retain more of their compensation without tax liability, potentially increasing willingness to join trials. This could improve access to experimental treatments and support lower-income individuals by preserving benefits like health coverage or food assistance.
- On Government Agencies: The Internal Revenue Service (IRS) will see reduced tax collections from these payments but simpler administration via the new exclusion. Agencies administering benefits (e.g., Social Security Administration, Department of Health and Human Services) must adjust eligibility calculations to ignore these funds, potentially increasing program costs slightly but promoting public health research.
- On International Relations: No direct impacts; the bill focuses on domestic tax and benefits policies.
Main Stakeholders Affected
- Clinical Trial Participants and Dependents: Primary beneficiaries, gaining tax-free income and protected benefits eligibility.
- Medical Research Entities: Pharmaceutical companies, universities, and hospitals sponsoring trials may see higher enrollment, accelerating drug development.
- Federal and State Agencies: IRS (tax enforcement), benefit programs (e.g., Medicaid, SNAP—Supplemental Nutrition Assistance Program, a food aid program), and health regulators (e.g., FDA—Food and Drug Administration) involved in trial oversight.
- Taxpayers Generally: Indirectly affected through potential minor revenue loss to the government.
Notable Legal, Constitutional, or Political Implications
- Legal: Strengthens incentives for medical research under existing health laws (e.g., expanding "approved" trials beyond life-threatening conditions). No conflicts with tax or benefits statutes, as it explicitly overrides conflicting provisions. Could lead to IRS guidance on what qualifies as "reasonable expenses."
- Constitutional: Aligns with Congress's power to regulate taxes (under Article I) and spending for public welfare; no apparent free speech, privacy, or equal protection issues.
- Political: Bipartisan introduction (by a Republican and Democrat) suggests broad support for advancing clinical research. May influence future health policy debates on incentives for innovation versus federal spending priorities.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Cosponsors (1)
Rep. Houlahan, Chrissy [D-PA-6]
Recent Actions
- 2025-06-26: Referred to the House Committee on Ways and Means.
- 2025-06-26: Introduced in House
- 2025-06-26: Introduced in House
Bill Versions
- To amend the Internal Revenue Code of 1986 to exclude from gross income certain compensation to clinical trial participants, and for other purposes. — issued 2025-06-26 — PDF (4 pages)