Gaining the inside track on new biotech tax credit

by Steve Levy, C.P.A., J.D., Tax Manager with the Donovan CPAs and Advisors On June 18, 2010, the Internal Revenue Service released Form 8942 and related instructions for applying for the Therapeutic Discovery Credit.  At the same time, the U.S. Department of Health and Human Services released the Project Information Memorandum to be completed and submitted along with Form 8942. Both Form 8942 and the Project Information Memorandum can be downloaded by visiting the IRS website for...

Feds spell out the rules on $1B biotech windfall

The federal government has fired the starting pistol on a $1 billion tax credit/grant program that could provide up to $5 million in R&D support for qualifying biotech companies. On Friday the Obama administration spelled out the rules on the new program, which is expected to be swiftly swamped by a deluge of applications.   "We expect the program to be heavily oversubscribed," BIO Spokesperson Ellen Dadisman told the Washington Post. "I think that's an indication of its popularity and...

Treasury releases Therapeutic Discovery Credit guidance

Steve Levy, C.P.A., J.D. is a Tax Manager with the Donovan CPAs and Advisors. He has specialized in the research credit and related incentives for over 13 years.  For more information about the Therapeutic Discovery Credit, visit www.cpadonovan.com.  On May 21, 2010, the U.S. Treasury released its guidance for applying for the Therapeutic Discovery Credit or Grant. The credit covers up to 50 percent of the cost of qualifying biomedical research, up to a maximum credit of $5...

Biotechs will have to scramble for a piece of $1B grant pie

A host of small and mid-sized biotech companies are massing at the starting line for the federal government's $1 billion tax credit/grant program. And a Treasury spokesperson told the Wall Street Journal that details on applying for the money are expected at any moment now. Speed will be of the essence for any developer looking to get a piece of this action. Slipped into the healthcare reform package at the urging of BIO, the government will provide 50 percent of the 2009 and 2010 project...

Minnesota promotes ‘sweet’ tax credits

Minnesota delegates gave away bags of chocolate at last week's BIO convention to advertise the state's "sweet" new tax credit for angel investors in unproven businesses. The state has to compete with neighbor Wisconsin, which has attracted a great deal of biotech business with a similar tax...

$1B in cash grants available soon for small biotech

by John Chase and Evan Ng, partners at Dorsey Whitney LLP The recently enacted healthcare reform legislation provides up to $1 billion in tax credits and cash grants for life sciences companies with 250 or fewer employees that have made or will make "qualified investments" in "qualifying therapeutic discovery projects" during 2009 and 2010. Credits and grants will be awarded through a competitive application process which is expected to commence on or before May 21, 2010. A "qualifying...

Biotechs start scrambling for $1B Treasury windfall

In just a few weeks the U.S. Treasury Department plans to start detailing the application rules around a $1 billion tax credit and grant program tailored to benefit the biotech industry. And consultants in the industry say that biotechs are already scrambling for a place in line. One analyst estimates that Massachusetts developers alone could gain $100 million of that--a windfall that can help cover 50 percent of R&D expenses in 2009 and 2010. That money will be available to biotech...