Harley Jacobsen Clinical Trial Participant Income Exemption Act of 2026

119th Congress Introduced by Jim Banks and 1 co-sponsor

If enacted, qualified clinical trial payments to participants and their dependents are excluded from gross income and do not count for federal or federally funded program eligibili

Introduced in Senate

Summary of Bill: Harley Jacobsen Clinical Trial Participant Income Exemption Act of 2026 (S.5127, 119th Congress)

Purpose and intent

Establish an exemption from gross income for certain payments made to individuals who participate in clinical trials.

Also provides that such payments cannot be used to determine eligibility for federal, state, or local benefits financed with federal funds.

Key provisions

New tax provision added: Sec. 139M – Clinical Trial Payments

Creates an exclusion from gross income for “qualified clinical trial payments.”
A “qualified clinical trial payment” is any amount paid to an individual:
- (1) as compensation for participation by the individual or a dependent, in an approved clinical trial; or
- (2) to reimburse or pay reasonable and necessary expenses incurred in connection with participation by the individual or a dependent in an approved clinical trial.
Definitions:
- Approved clinical trial: Defined with respect to the Public Health Service Act by substituting “disease or condition” for “life-threatening disease or condition” in the current statutory definition, per section 2709(d)(1) of the PHS Act.
- Dependent: As defined in Internal Revenue Code section 152.
Effective date: Applies to amounts paid after December 31, 2025.
Administrative change: Adds Sec. 139M to the table of sections in Part III of Subchapter B, Chapter 1 of the Internal Revenue Code.

Section 3 – Clinical Trial Compensation Not Counted for Federal/State Benefit Eligibility

Establishes that a qualified clinical trial payment shall not be counted as income or resources for determining eligibility for any federal program or for any state/local program financed in whole or in part with federal funds.
Ties the eligibility treatment to the definition of “qualified clinical trial payment” in Sec. 139M(b).

Affected Parties and Impacts

Individuals participating in clinical trials (including dependents): May receive tax-free compensation and expense reimbursements under the new 139M provision.

Dependents of participants: Included in the eligible recipient group for the tax exemption and for purposes of benefit-related considerations.

Clinical trial sponsors and researchers: Affected indirectly in terms of how compensation costs are treated for tax purposes; may influence compensation practices.

Beneficiary programs (federal, state, and local): Protections added to ensure payments do not count toward income/resources for eligibility determinations for such programs.

Procedural and timeline notes

Introduced in the Senate on July 23, 2026 by Senator Banks with Senator Cortez Masto as a co-sponsor.

Referred to the Senate Committee on Finance for consideration.

Effective date for the tax exemption: payments made after December 31, 2025.

The bill does not specify a companion measure in the House in the provided text; it is a Senate proposal at this time.

Overall impact

The bill provides a clear federal tax exemption for compensation and reimbursed expenses paid to clinical trial participants, aiming to reduce financial barriers to participation.

It also ensures such payments do not count toward qualification criteria for federal or federally funded programs, potentially expanding access to benefits through simpler treatment of participants’ income and resources.