The "Mental Health Research Accelerator Act of 2025" introduces a tax credit for translational research into neurodegenerative diseases and psychiatric conditions, aiming to spur the development of new treatments and devices.
Mike Thompson
Representative
CA-4
The "Mental Health Research Accelerator Act of 2025" introduces a tax credit for expenses related to translational research on neurodegenerative diseases and psychiatric conditions. This credit aims to encourage the development of new treatments and devices for central nervous system disorders by offering a 25% tax credit for qualifying research expenses, subject to national limits and allocation based on scientific merit. The tax credit is available from 2026 through 2035, with specific funding amounts allocated for each year. This credit is designed to promote public-private partnerships and the repurposing of existing drugs while ensuring that expenses are not used for other research credits.
Bill Proposes Billions in Tax Credits to Boost Mental Health & Brain Disease Research Starting 2026
Congress is looking at a new way to kickstart research for brain-related conditions. The "Mental Health Research Accelerator Act of 2025" proposes a significant tax break—specifically, a 25% tax credit—for companies and organizations diving into what's called translational research. Think of this as the work that bridges discoveries made in the lab to actual treatments for patients dealing with neurodegenerative diseases (like Alzheimer's or Parkinson's) and serious psychiatric conditions.
Fueling the Research Engine
So, how does this fuel get injected? The bill sets aside a hefty sum, starting with $1 billion in available credits for 2026, ramping up to $2 billion per year from 2027 through 2030, and then back to $1 billion for 2031. It's not a free-for-all, though. A government Secretary will allocate these credits based on applications, prioritizing projects with high "scientific merit." The focus is clearly on developing new therapies and devices for central nervous system disorders, finding new uses for existing drugs, and encouraging teamwork between public and private research groups. The credit is slated to run through 2035.
The Nuts and Bolts: Rules of the Road
There are some important details in the fine print. First, organizations can't double-dip; expenses claimed for this new credit can't also be claimed for the general research credit that already exists. However, these expenses can be factored into calculating the baseline for future general research credits, which is a subtle but potentially helpful point for ongoing R&D. Also, standard tax rules apply: the portion of expenses covered by the credit can't be taken as a business deduction. Interestingly, the bill allows tax-exempt organizations, like universities or research nonprofits, to transfer the credit they're awarded to their eligible partners—likely the companies they might be collaborating with on a project. This could make partnerships more attractive.
Real-World Ripple Effects?
The goal here is straightforward: incentivize more investment in developing treatments for complex and devastating brain conditions. If this works as intended, we could see more resources flowing into biotech startups, pharmaceutical research arms, and university labs tackling these challenges. The structure, with its capped funding and merit-based allocation, aims to direct money toward promising projects. However, the effectiveness will depend heavily on how that allocation process plays out in practice and whether the annual funding caps are sufficient to truly accelerate breakthroughs in these difficult fields. It's a targeted financial nudge aimed at speeding up the journey from scientific discovery to potential patient relief.