What does Preamble of American Innovation Act of 2026 do?

This bill, formally titled 'To amend the Internal Revenue Code of 1986 to promote new business innovation, and for other purposes,' aims to modify the Internal Revenue Code of 1986.

What does SHORT TITLE. of American Innovation Act of 2026 do?

This bill is formally titled the American Innovation Act of 2026

What does SIMPLIFICATION AND EXPANSION OF DEDUCTION FOR START-UP AND of American Innovation Act of 2026 do?

This section amends Section 195 of the Internal Revenue Code of 1986 to simplify and expand the deduction for start-up and organizational expenditures. Taxpayers can elect to deduct up to $20,000 of start-up and organizational expenditures in the taxable year a trade or business begins. The remainder of such expenditures shall be charged to capital account and allowed as an amortization deduction over 180 months. The $20,000 and $120,000 amounts are subject to inflation adjustment for taxable years beginning after December 31, 2026. The section also makes conforming amendments to other parts of the Internal Revenue Code.

What does PRESERVATION OF START-UP NET OPERATING LOSSES AND TAX CREDITS of American Innovation Act of 2026 do?

This section amends Section 382(d) of the Internal Revenue Code of 1986 to create an exception for start-up losses. It introduces the term 'start-up period taxable year,' defined as a taxable year beginning before the close of a 3-year period after a trade or business begins and ending after January 31, 2026. The 'net start-up loss' is calculated based on the ratio of income/deduction items allocable to a trade or business to the total net operating loss for the start-up period. The section also addresses the application of these rules in cases of ownership changes, multiple trade or businesses, and certain insolvency transactions. Section 383 of the Code is amended to create a similar exception for start-up excess credits, mirroring the structure of the net operating loss provisions. The amendments apply to taxable years ending after January 31, 2025.

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American Innovation Act of 2026

Last updated: 3/25/2026 · Introduced: 3/25/2026

Author: Marsha Blackburn (R-TN)

TL;DR (AI)

The bill expands a deduction for start-up and organizational business expenses, allowing taxpayers to deduct up to $20,000 initially (subject to inflation) with the remainder amortized over 180 months.
It creates an exception to existing rules regarding net operating losses and excess credits for businesses during their start-up period, enabling them to utilize these credits more effectively.
The bill defines a 'start-up period taxable year' and establishes calculations for 'net start-up loss' and 'start-up excess credits' to facilitate these exceptions.

119th Congressin committeeHR. 1778(In Committee)Official page

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Other Sections

Includes provisions on preamble, short title., and 2 more.

4 sections

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