2023 subsection (b) and section 3301 . (B) Section 3302 of such Code is amended by adding at the end the following new subsection: (i) Credit for research expenditures of qualified small businesses Any portion of the credit under section 3111(f) which is credited under such section to the tax under section 3301 shall be treated as a credit under this section. Subsection (c) shall not apply to any such credit. . (c) Qualified small business definition expanded Section 41(h)(3)(A) of such Code is amended— (1) in clause (i)(I), by striking $5,000,000 and inserting $10,000,000 , (2) by amending clause (i)(II) to read as follows: (II) such entity did not have gross receipts (as so determined) exceeding an aggregate of $25,000 for any taxable year preceding the 10-taxable-year period ending with such taxable year, and , and (3) by adding at the end the following flush sentence: For purposes of the preceding sentence, gross receipts shall be determined under the rules of section 448(c)(3) without regard to subparagraph (A) thereof, except that such term shall not include any contributions to the capital of a corporation (other than contributions by a shareholder) or any amount described in section 118(b) (other than receipts from customers in exchange for goods or services). . (d) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2023. 3. Modifications to alternative simplified credit for new and small businesses (a) In general Paragraph (4) of section 41(c) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph: (D) Special rules for qualified small businesses In the case of a qualified small business— (i) Credit rate Subparagraph (A) shall be applied by substituting 20 percent for 14 percent . (ii) Special rule for 1st year of qualified research expenses If the taxpayer has no qualified research expenses in any taxable year preceding the taxable year for which the credit is being determined, subparagraph (B)(ii)