New Tax Credit for Therapeutic Research Projects
(May 11, 2010)
The newly enacted Qualified Therapeutic Discovery Project (QTDP) credit (part of the Patient Protection and Affordable Care Act passed on March 23, 2010) allows certain taxpayers to claim a grant or credit for qualified investments made in 2009 and 2010. Eligible taxpayers include biomedical companies with fewer than 250 employees.
Up to 50 percent of qualified investment expenses are eligible for the credit. Qualified expenses include expenses incurred for projects designed to 1) treat or prevent diseases, 2) diagnose diseases or conditions through molecular factors, and 3) develop a product, process, or technology to further the delivery of therapeutics.
Taxpayers must submit an application with information supporting the qualified expenses to the Internal Revenue Service (IRS). The IRS has not yet established a QTDP program to consider and award certifications but is expected to issue guidance on the application process no later than May 21, 2010. The total amount of credits under the program cannot exceed $1 billion during the two-year period. Because of the expected competitive nature of the application process, affected taxpayers should begin identifying projects that might qualify for the credit.
For more information on how this might affect you, please contact Shelby Ford at 865.539.5618 or firstname.lastname@example.org, Marie Powell at 317.706.2745 or email@example.com, or any Crowe Horwath LLP tax professional.
Under U.S. Treasury rules issued in 2005, we must inform you that any advice in this communication to you was not intended or written to be used, and cannot be used, to avoid any government penalties that may be imposed on a taxpayer.