New IRS Guidance Assists Applicants for Section 48D Therapeutic Discovery Project Tax Credit

Section 48D of the Internal Revenue Code (as enacted on March 23, 2010 by the "Patient Protection and Affordable Care Act") provides a new therapeutic discovery project tax credit that is designed to encourage investment in new therapies. Section 48D provides $1 billion in tax incentives for qualified therapeutic discovery projects (QTDPs), as defined under the statute and subsequent guidance, for qualifying taxpayers having 250 or fewer employees (taking into account certain aggregation rules). Specifically, Section 48D provides a 50-percent credit (or a grant in lieu of the credit) for qualifying investments in QTDPs made during 2009 and 2010.