This bill excludes compensation received by participants in qualified clinical trials from gross income and ensures these payments do not affect eligibility for federal assistance programs.
Mike Kelly
Representative
PA-16
This bill proposes to amend the Internal Revenue Code to exclude certain compensation received by individuals participating in approved clinical trials from their gross income, meaning these payments would not be subject to federal income tax. Furthermore, the legislation ensures that these clinical trial payments will not be counted as income or resources when determining eligibility for federal, state, or local assistance programs. This change is intended to encourage participation in medical research without penalizing participants financially.
Clinical Trial Payments Made Tax-Free and Exempt from Benefit Eligibility Checks Starting 2026
If you’ve ever considered participating in a medical clinical trial, you know the compensation can be a financial lifeline, but it often comes with a catch: taxes and the risk of losing government assistance. This proposed legislation is designed to remove those two major hurdles for people participating in critical medical research.
The "No Tax, No Loss" Policy
This bill introduces two major changes to the tax code and federal assistance rules, kicking off after December 31, 2025. The first change, outlined in Section 1, makes payments received for participating in an approved clinical trial completely exempt from federal income tax. This means if you get paid for participating, or if the money simply covers your reasonable and necessary costs for taking part, that cash is yours to keep, tax-free. They’re defining an "approved clinical trial" by referencing existing standards in the Public Health Service Act, specifically for trials focused on life-threatening diseases or conditions. Think of it this way: the money you get for helping advance medicine won't accidentally push you into a higher tax bracket or require a complicated reporting headache.
Protecting the Safety Net
The second change, covered in Section 2, is arguably even more critical for low-income participants. It ensures that payments received from qualified clinical trials will not be counted as income or resources when determining eligibility for federal assistance programs. This is huge. For someone relying on essential aid like SNAP (food assistance) or housing support, receiving a payment for a trial could currently jeopardize their benefits, making participation a high-stakes financial gamble. This bill explicitly removes that risk. The protection also extends to state and local programs that receive federal funding, creating a broad shield.
Real-World Impact: Who Benefits?
This isn't just a technical change; it’s a practical boost for the people who make medical research possible. Imagine a single parent who needs $1,500 to cover travel and lost wages while participating in a life-saving drug trial for their child. Under current rules, that $1,500 could be taxed, and worse, it could be counted as income, potentially disqualifying them from necessary aid like Medicaid or subsidized childcare. This legislation ensures that the full $1,500 goes toward supporting their family and participation, without penalty. By removing the financial disincentive and the risk of losing benefits, this bill makes it easier for people from all economic backgrounds to participate in research, which is essential for developing effective treatments that work for everyone.
While the bill is fairly straightforward and beneficial, it does rely on a specific existing definition of an "approved clinical trial" tied to trials for life-threatening diseases. Future changes to that underlying public health statute could technically impact the scope of this tax exclusion, but for now, the intent is clear: making it financially safe and worthwhile to contribute to medical breakthroughs.