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Application Available for Qualifying Therapeutic Discovery Project Program

Today the IRS made available Form 9842-Application for Certification of Qualified Investments Eligible for Credits and Grants Under the Qualifying Therapeutic Discovery Project Program.

As you know, Senator Max Baucus championed the creation of this new program to support biomedical research by small firms. The program provides tax credits and grants to small firms that show significant potential to produce new and cost-saving therapies.

The new Therapeutic Discovery Tax Credit covers up to 50 percent of the cost of qualifying biomedical research, up to a maximum credit of $5 million per firm and is available to firms with fewer than 250 employees. 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. 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. 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 or reduce health care costs. Only projects that show a reasonable potential to meet these 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.

Please see below for links to all relevant documents, including Form 9842. Please do not hesitate to contact me at [email protected] or (202) 224-0330 if you have questions about the Therapeutic Discovery Project Program.

Link to the IRS press release: http://www.irs.gov/newsroom/article/0,,id=224513,00.html

Link to Form 9842: http://www.irs.gov/pub/irs-pdf/f8942.pdf

Link to Instructions for Form 9842: http://www.irs.gov/pub/irs-pdf/i8942.pdf

Link to Q & A for the Qualifying Therapeutic Discovery Project Program: http://www.irs.gov/newsroom/article/0,,id=224011,00.html

Link to Text of Notice 2010-45 for the Qualifying Therapeutic Discovery Project Program: http://www.irs.gov/pub/irs-drop/n-10-45.pdf

­­­­­­­­­Kerra Melvin|Tax Research Assistant|Senate Committee on Finance|Max Baucus (D-MT), Chair|(202) 224-4515

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