Sunday, June 6, 2010

Tax Credits Available

The Department of the Treasury announced the guidelines to use to apply for the new “Therapeutic Discovery Project” created by the Affordable Care Act. The program will provide tax credits or grants to small biomedical firms that show significant potential to support groundbreaking research.

As part of the review process for research project, HHS will evaluate each project for its potential to produce new therapies, address unmet medical needs, reduce healthcare costs, or to advance the goal of curing cancer. Only projects that show a reasonable potential to meet the goals will be certified as eligible for the credit. The IRS will issue certifications by the end of October based on the determinations made by HHS.

The tax credit’s allocation will take into consideration which projects show the greatest potential to create and sustain high quality, high paying jobs in the U.S., and to advance competitiveness in the fields of life, biological and medical sciences. Today the biotechnology industry employs 1.3 million workers and the industry continues to be a key growth engine for the economy.

The credit covers up to 50 percent of the cost of qualifying biomedical research, up to a maximum credit of $5 million per firm with $1 billion overall, and is only available to firms with fewer than 250 employees.

To help small businesses provide an immediate boost to biomedical research, the credit is effective for investments made in 2009 and 2010. Firms can opt to receive a grant instead of a tax credit, so start-ups that are not yet profitable can benefit as well.

Companies may submit applications for certification beginning June 21, 2010 and applications must be postmarked no later than July 21, 2010. To download the IRS Notice on the Therapeutic Discovery Credit Program for further details and information, go to

For more information, call Julie Hanlon Bolton (202) 622-3040, or email JoAnne Goodnight at, or call Candace Fisher (651)-312-2109.