The recent Patient Protection and Affordable Care Act, Pub. L. No. 111-148 (PPACA), established a limited-time federal tax credit and grant program for certain investments incurred in 2009 and 2010 by small employers for qualifying therapeutic discovery projects (QTDP Credit and Grant Program). This health care reform bill authorized up to $1 billion in investment tax credits and cash grants through the QTDP Credit and Grant Program to life sciences companies with no more than 250 employees to defray the costs of biomedical research. Because the total amount of tax credits and grants may not exceed $1 billion, eligible companies must apply for and be selected to receive such credits or grants through a competitive certification process.

Rules and related guidance regarding the program are detailed in IRS Notice 2010-45, which establishes the application process, timetable, and selection criteria for the Treasury Department’s award of certifications under the QTDP Credit and Grant Program. To compete for a credit or grant allocation, companies must file an application for certification of their qualified investment in a qualifying research project by July 21, 2010.