To amend the Internal Revenue Code of 1986 to exclude from gross income certain compensation to clinical trial participants, and for other purposes.
- Sponsor
- Rep. Kelly, Mike [R-PA-16]
- Committees
- Ways and Means Committee (primary)
- Last action
- Jun 26, 2025
Bottom line
The bill aims to remove financial disincentives for clinical trial participation by exempting compensation from income tax and protecting participants' eligibility for federal and federally-funded assistance programs.
What it actually does
This bill amends the Internal Revenue Code of 1986 to exclude compensation received by individuals for participating in approved clinical trials from their gross income, making such payments tax-free. Additionally, it mandates that these clinical trial payments shall not be considered income or resources when determining an individual's eligibility for benefits or assistance under any federal program, or any state or local program financed with federal funds.
Proponents argue
Proponents argue that this legislation will significantly boost participation in crucial clinical trials by eliminating financial barriers, particularly for low-income individuals who might otherwise face tax burdens or lose access to vital social safety net benefits. This, in turn, will accelerate medical research and the development of new treatments and cures.
Opponents contend
Potential opponents might raise concerns about the precedent of creating specific carve-outs in the tax code, which could lead to revenue loss for the federal government. They might also argue that while well-intentioned, such exclusions could add complexity to tax administration and benefit eligibility rules, potentially leading to calls for similar treatment for other forms of compensation.
The bill text is concise and clearly written, allowing for a quick and thorough understanding of its provisions within the time typically allotted for legislative review.
Section 1(a), new Section 139J of the Internal Revenue Code of 1986
Tax Exclusion for Qualified Clinical Trial Payments
This provision amends the Internal Revenue Code to establish a new section, 139J, which explicitly excludes "qualified clinical trial payments" from an individual's gross income. This means that money received by an individual for participating in an approved clinical trial, or to reimburse reasonable and necessary expenses incurred during participation, will not be subject to federal income tax. This aims to ensure that compensation for contributing to medical research does not create an unexpected tax burden for participants.
Supporters argue
Supporters argue that this tax exclusion removes a significant financial barrier, making clinical trial participation more attractive and accessible. This is crucial for increasing enrollment, particularly among diverse populations, which is vital for the validity and generalizability of medical research findings.
Critics contend
Critics might contend that while the intent is positive, creating specific tax carve-outs can complicate the tax code and potentially lead to demands for similar exclusions for other types of compensation, eroding the general tax base.
Tradeoffs
This provision balances the public good of incentivizing medical research participation against the principle of a broad and consistent tax base. It prioritizes encouraging research by accepting a potential reduction in federal tax revenue.
Section 2(a)
Protection of Federal Program Eligibility
This section mandates that any qualified clinical trial payment received by an individual cannot be counted as income or resources when determining their eligibility for benefits or assistance under any Federal program, or any State or local program that receives Federal funding. This critical protection ensures that individuals, especially those with low incomes, can participate in clinical trials without fear of losing access to essential social safety net programs like Medicaid, SNAP, or housing assistance, which are often tied to strict income and asset limits.
Defines "approved clinical trial" by referencing section 2709(d)(1) of the Public Health Service Act (42 U.S.C. 300gg-8(d)(1)) but crucially modifies the definition by applying "disease or condition" for "life-threatening disease or condition." This expands the scope of qualifying trials.
Section 1(c)(1)
Why it matters:While referencing existing law for definitions is standard legislative practice, the subtle but significant change from "life-threatening" to any "disease or condition" could easily be overlooked by a casual reader, yet it dramatically broadens the bill's applicability.
Case for: Supporters would argue that expanding the definition beyond "life-threatening" conditions allows for a broader range of clinical trials to qualify for the tax exclusion and benefit protection. This encourages participation across a wider spectrum of medical research, including studies on chronic conditions or preventative measures, which are also vital for public health.
Case against: Critics might argue that broadening the scope could lead to a larger fiscal impact from the tax exclusion and extend benefit eligibility protections to trials that are less critical or urgent, potentially diluting the focus on the most pressing medical needs or increasing the overall cost to the federal budget.
Estimated impact: This modification significantly expands the universe of clinical trials whose participants would benefit from the tax exclusion and benefit eligibility protection. This will likely increase the number of individuals affected and the overall fiscal impact compared to a more restrictive definition.