The federal Internal Revenue Services has released additional guidance regarding the Qualifying Therapeutic Discovery Project Tax Credit. Here are key updates released May 19 by the IRS:
– The credit is worth up to 50 percent of the cost of qualifying investments, up to a maximum credit of $5 million per firm and $1 billion overall.
– To provide an immediate boost to U.S. biomedical research and the small businesses that conduct it, the credit is effective for investments made in 2009 and 2010.
– Qualifying firms must have 250 employees or fewer.
– The guidance describes the process by which firms can apply to have their research projects certified as eligible for the credit. The formal application window will extend from June 21 to July 21, 2010. Applicants will receive a determination no later than Oct. 29, 2010.
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As part of the review process for research projects, the Department of Health and Human Services (HHS) will evaluate each project for its potential to produce new therapies, address unmet medical needs, reduce health care costs or advance the goal of curing cancer. Only projects that show a reasonable potential to meet one or more of these goals will be certified as eligible for the credit.