Harley Jacobsen Clinical Trial Participant Income Exemption Act of 2026
- Sponsor
- Sen. Banks, Jim [R-IN]
- Committees
- Finance Committee (primary)
- Last action
- Jul 23, 2026
Bottom line
The bill aims to remove financial disincentives for individuals to participate in clinical trials by exempting related payments from taxation and from affecting eligibility for public assistance programs.
What it actually does
This bill amends the Internal Revenue Code of 1986 to exclude from gross income any compensation or expense reimbursement received by an individual for participating in an approved clinical trial, or for a dependent's participation. Additionally, it mandates that these payments are not to be considered income or resources when determining eligibility for any federal program or any state or local program financed with federal funds.
Proponents argue
Supporters argue that this legislation will significantly encourage greater participation in clinical trials by eliminating financial barriers and disincentives, particularly for low-income individuals who might otherwise risk losing critical benefits. This increased participation is expected to accelerate medical research and the development of new, life-saving treatments and therapies.
Opponents contend
Critics might contend that while the bill's intent is laudable, it creates a new tax exemption that could reduce federal revenue and add complexity to the tax code. Some may also argue against expanding categories of excluded income for program eligibility, citing concerns about program integrity or administrative burdens, though these arguments are less direct for this specific, well-defined exclusion.
The bill is exceptionally short and clearly written, making it highly accessible for any reader to quickly grasp its core provisions and implications.
Section 2(a), inserting new Section 139M into the Internal Revenue Code of 1986.
Tax Exemption for Qualified Clinical Trial Payments
This provision establishes a new section in the Internal Revenue Code, Section 139M, which explicitly excludes any amount received as a 'qualified clinical trial payment' from an individual's gross income for federal tax purposes. This means that compensation or reimbursements for reasonable and necessary expenses incurred by an individual or their dependent for participating in an approved clinical trial will not be subject to federal income tax.
Supporters argue
Supporters argue this provision removes a significant financial disincentive for individuals to participate in crucial medical research, making clinical trials more accessible and potentially speeding up the development of new treatments. It ensures that compensation for contributing to public health is not diminished by taxation.
Critics contend
Critics might argue that this creates another carve-out in the tax code, potentially complicating tax administration and reducing the overall tax base. They might contend that all income, regardless of source, should be subject to taxation unless there's an overwhelming public interest, and this specific exemption might not meet that bar for all types of compensation.
Tradeoffs
The provision balances the goal of encouraging medical research participation with the principle of a broad tax base and potential revenue loss. It also navigates the tension between treating all income equally and providing specific incentives for socially beneficial activities.
Section 3
Eligibility Protection for Federal and Federally-Funded Programs
This section mandates that 'qualified clinical trial payments' shall not be taken into account as income or resources when determining an individual's eligibility for benefits or assistance under any federal program. This also applies to any state or local program that receives federal funding, ensuring that participants do not lose access to vital assistance (such as Medicaid, SNAP, or housing assistance) due to compensation received for their involvement in clinical trials.
Defines 'approved clinical trial' by referencing an existing definition in the Public Health Service Act (42 U.S.C. 300gg-8(d)(1)) but crucially modifies it to include trials for any 'disease or condition' instead of only 'life-threatening disease or condition.'
Section 2(c)(1)
Why it matters:This is standard legislative practice for incorporating and modifying existing statutory definitions, rather than being an evasive tactic.
Case for: Supporters would argue that expanding the definition to include trials for any disease or condition is essential to encourage participation across the full spectrum of medical research, not just for the most severe illnesses. This broadens the bill's positive impact on medical innovation.
Case against: Critics might argue that broadening the scope beyond life-threatening conditions could lead to a larger tax expenditure and a wider range of payments being excluded from income and program eligibility, potentially increasing the fiscal impact beyond what might be initially perceived for critical research.
Estimated impact: Significantly expands the types of clinical trials whose participants would benefit from the tax exclusion and eligibility protection, increasing the potential number of affected individuals and the overall fiscal impact.