IRS issues rules for health tax credits - KAIT Jonesboro, AR - Region 8 News, weather, sports

IRS issues rules for health tax credits

The Internal Revenue Service on Friday released the guidelines that small companies can use to apply for tax credits to spur medical research.

The credit will cover up to 50 percent of the cost of qualifying biomedical research, up to a maximum credit of $5 million per business. The credit is only available to companies with fewer than 250 employees.

"This new tax credit will help advance research to find lifesaving treatments and help U.S. companies lead the way in innovative medical discoveries," Treasury Secretary Timothy Geithner said in a statement.

The IRS released the rules companies will need to follow to apply to have their research projects certified as eligible to participate in the government's Therapeutic Discovery Project Program.

The tax credit, which will be available for investments made in 2009 and 2010, was included in the sweeping health care overhaul legislation that President Barack Obama signed into law in March.

Companies may submit applications for certification for the credit beginning on June 21. As part of the review process, the Health and Human Services Department 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 tax credit. The IRS will issue the certifications by the end of October.

The biotechnology industry employs 1.3 million workers in the United States.

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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