H.R. 2085: Mental Health Research Accelerator Act of 2025

The Mental Health Research Accelerator Act of 2025 proposes changes to the tax code to support translational research aimed at neurodegenerative diseases and psychiatric conditions. Here's a breakdown of the key components of the bill:

Tax Credit for Research Expenses

The bill introduces a new tax credit for businesses or individuals who incur expenses for translational research regarding neurodegenerative diseases and psychiatric conditions. Specifically:

• The credit is set at **25%** of qualified expenses incurred during the taxable year.
• For the year 2026, there is a cap of **$1 billion** on the total amount of credits that can be allocated, increasing to **$2 billion** for each year from 2027 to 2030, and then returning to **$1 billion** for 2031.
• Any unused portion of the credit cap can be carried over to the next calendar year.

Application and Allocation Process

The Secretary of the Treasury is tasked with creating regulations to administer the credit, which includes:

• Allocating credit based on the scientific merit of the research projects.
• Encouraging projects that cover all phases of research, particularly those focusing on new treatments and devices aimed at the central nervous system.
• Setting standards for repurposing existing drugs and devices.
• Promoting public-private partnerships, prioritizing collaborative efforts and sharing of intellectual property.

Transfer of Credit

The bill allows tax-exempt entities, such as non-profit organizations and governmental bodies, to transfer the credit to an eligible project partner if they elect to do so. This means:

• Tax-exempt entities can partner with businesses or individuals to utilize the tax credits for research expenses.
• Specific rules are established for partnerships, including how the credit will be shared among partners.

Coordination with Other Tax Credits

The bill makes clear that expenses accounted for under this research credit cannot also be accounted for under another tax credit related to increasing research expenditures. However, some expenses may still count toward base period research expenses for future tax calculations.

Termination of Credit

The tax credit is set to expire after December 31, 2035, indicating that this is a temporary provision aimed at incentivizing early-stage research.

Deduction Limitations

Additionally, the bill specifies that businesses cannot deduct the part of their expenses that they have counted toward this credit when calculating their taxes, thereby ensuring that the credit is not double-dipped.

Effective Date

The provisions of this bill would take effect immediately upon enactment.

Relevant Companies

• ABBV - AbbVie could potentially benefit due to their focus on neurological and psychiatric therapeutics.
• BIIB - Biogen is known for its research in neurodegenerative diseases and may seek to leverage tax credits for related research.
• PFE - Pfizer may conduct research under this act, as it has a wide portfolio that includes neuropsychiatric treatments.
• NVCR - Novocure's focus on cancer treatments that may intersect with neurodegenerative considerations could position them to benefit from this credit.