Health Care Reform Includes Tax Credit for Qualifying Life Sciences Companies

The Patient Protection and Affordability Care Act adds a new discretionary tax credit, the Therapeutic Discovery Project Tax Credit program (Section 48D).   This new, temporary program will be a valuable tool to companies that develop cutting edge drugs, diagnostics, biologics, and medical devices. The program is targeted for small to mid-sized biomedical companies with 250 or fewer employees.

The IRS, in conjunction with Health and Human Services, will determine eligibility and merits of projects based on a number of qualifying factors that include, among other qualifiers, the treatment of unmet medical needs, the prevention, detection and treatment of chronic diseases and conditions, the reduction of healthcare costs and the advancement of curing cancer within a 30-year timeframe.  Other factors may include jobs creation in the US and advancement of US competitiveness in the fields of life, biological and medical sciences. 

For the two-year period 2009 and 2010 taxpayers will have the option of applying for a cash grant instead of the tax credit.  There is a $1 billion cap on total awards for this new competitive program so qualifying companies are encouraged to apply as early as possible. 

The Treasury Department will issue guidelines implementing the program on or before May 22, 2010.
BioOhio has scheduled a Webinar on the topic Friday May 14 at 11 a.m. that will feature tax/finance experts from BioOhio member firms Skoda Minotti and Brixey & Meyer, who will outline both technical aspects of the program and practical preparation steps.

A recording of this Webinar will be available to BioOhio members on the BioOhio site.  For more information, visit BioOhio website

More information is available here