INDIANAPOLIS, June 1 /PRNewswire/ -- Small- to mid-sized biotech companies can soon apply for a new tax incentive that allows them to claim a credit for 50 percent of their qualified investment in new medical technologies for tax years 2009 and 2010.
The Qualifying Therapeutic Discovery Project Credit is part of the Patient Protection and Affordable Care Act created by the Obama administration and signed into law in March. The bill states that qualified therapeutic discovery projects must involve activities that are designed to treat areas of unmet medical need. New technologies can also be designed to prevent, detect, treat and potentially cure chronic or acute diseases and conditions.
"The incentive will provide the capital these biotech companies need to further their research and development programs in hopes of creating new treatments, therapies and cures for disease," said TJ Sponsel, director at specialty tax firm McGuire Sponsel. "It is a great opportunity for qualifying companies but they have to act fast. Once the money is gone, it's gone."
Companies applying for the credit must submit applications from June 21 through July 21. The Internal Revenue Service will issue certifications by Oct. 29. Taxpayers must file a separate application for each qualified investment being pursued and qualified investments are capped at $10 million per taxpayer.
"Qualified investments include wages, supplies and lab costs, depreciable property, contractor costs and other development costs," Sponsel said. "There will be an emphasis placed on qualitative aspects of the research and experimentation focused on creating high-quality, high-paying jobs in the U.S. and advancing the country's overall competitiveness in the fields of life, biological and medical sciences."
All claims must be substantiated with supporting narratives, including a discussion of scientific rationale and evidence relied on for the project, a description of the nature of development of the project and a description of the resources, management experience and organizational capacity of the applicant. Congress has asked the treasury department to approve qualified applications within 30 days.
To learn more in-depth details and guidelines for applying for a Qualifying Therapeutic Discovery Project Credit, visit www.mcguiresponsel.com/biotech or call Sponsel at (317) 564-5002.
SOURCE McGuire Sponsel