{"id":5045,"date":"2020-08-05T21:45:11","date_gmt":"2020-08-05T21:45:11","guid":{"rendered":"https:\/\/sarahf10.sg-host.com\/?p=5045"},"modified":"2021-02-23T15:02:16","modified_gmt":"2021-02-23T15:02:16","slug":"orphan-drug-credits-encouraging-research-in-rare-diseases","status":"publish","type":"post","link":"https:\/\/taxops.com\/orphan-drug-credits-encouraging-research-in-rare-diseases\/","title":{"rendered":"Orphan Drug Credits: Encouraging Research in Rare Diseases"},"content":{"rendered":"\n<div class=\"wp-block-image\"><figure class=\"aligncenter size-large\"><img decoding=\"async\" width=\"741\" height=\"392\" src=\"data:image\/gif;base64,R0lGODlhAQABAIAAAAAAAP\/\/\/yH5BAEAAAAALAAAAAABAAEAAAIBRAA7\" data-src=\"https:\/\/taxops.com\/wp-content\/uploads\/2020\/08\/Orphan-Drug-Credit.png\" alt=\"\" class=\"wp-image-5046 lazyload\" data-srcset=\"https:\/\/taxops.com\/wp-content\/uploads\/2020\/08\/Orphan-Drug-Credit.png 741w, https:\/\/taxops.com\/wp-content\/uploads\/2020\/08\/Orphan-Drug-Credit-480x254.png 480w\" sizes=\"(min-width: 0px) and (max-width: 480px) 480px, (min-width: 481px) 741px, 100vw\" \/><noscript><img decoding=\"async\" width=\"741\" height=\"392\" src=\"https:\/\/taxops.com\/wp-content\/uploads\/2020\/08\/Orphan-Drug-Credit.png\" alt=\"\" class=\"wp-image-5046 lazyload\" srcset=\"https:\/\/taxops.com\/wp-content\/uploads\/2020\/08\/Orphan-Drug-Credit.png 741w, https:\/\/taxops.com\/wp-content\/uploads\/2020\/08\/Orphan-Drug-Credit-480x254.png 480w\" sizes=\"(min-width: 0px) and (max-width: 480px) 480px, (min-width: 481px) 741px, 100vw\" \/><\/noscript><\/figure><\/div>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\"><p>Researching a rare disease? Get tax credit for that with the federal Orphan Drug Credit.<\/p><\/blockquote>\n\n\n\n<p class=\"wp-block-paragraph\">By <a href=\"https:\/\/taxops.com\/team\/jamie-overberg\/\" target=\"_blank\" rel=\"noreferrer noopener\">Jamie Overberg<\/a><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The orphan drug credit (ODC) is&nbsp;a federal tax credit available to&nbsp;companies working to find cures to&nbsp;rare diseases. It is&nbsp;not widely known&nbsp;but when claimed, provides taxpayers an opportunity to reduce the cost of R&amp;D.&nbsp;The research must meet R&amp;D criteria that address technical uncertainty through a process of experimentation.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The ODC\u00a0allows a 50 percent credit of the qualified clinical testing expenses\u00a0(CTE)\u00a0for a taxable year. Clinical testing expenses that qualify include clinical trial costs, in house wages, supplies, outside contract and payments made to research or university organizations.\u00a0\u00a0<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The ODC only applies to pharmaceutical discoveries for a\u00a0rare disease or condition. Specifically, &#8220;rare&#8221;\u00a0means any disease or condition which affects less than 200,000 persons in the United States, or affects more than 200,000 persons in the U.S., but for which there is no reasonable expectation that the\u00a0cost of developing and making available a drug for such a disease will be recovered through sales\u00a0in the U.S.\u00a0\u00a0This a great applicability to pediatric drug therapies.\u00a0<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Orphan drug status is determined by Federal Food, Drug, and&nbsp;Cosmetic&nbsp;Act (FDA) based on facts and circumstances. Taxpayers can begin&nbsp;tallying&nbsp;expenses&nbsp;the date the FDA designates ODC status.&nbsp;&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">R&amp;D and ODC credits are calculated separately to avoid double dipping.\u00a0\u00a0As such, a taxpayer may not include\u00a0ODC expenditures with\u00a0another claim for\u00a0research tax credits. Since the research tax\u00a0is\u00a0only\u00a020 percent,\u00a0the potential savings from ODC is greater\u00a0at 50 percent, when available.\u00a0Taxpayers can claim both R&amp;D and ODC in the same year, provided there is no overlap in\u00a0type of\u00a0qualifying expenses.\u00a0\u00a0<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Another distinction between ODC and R&amp;D credits is the amount of qualified contractor spend allowed. The ODC allows for 100 percent of qualified contractor spend to be included as CTE, while the R&amp;D credit taps the amount of the costs of eligible QRE at 65 percent.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Both the ODC and R&amp;D credit can be taken in the same year but claiming the ODC credit is simpler.\u00a0Taxpayers claim the ODC credit in their\u00a0federal tax\u00a0filings.\u00a0Documentation\u00a0used\u00a0in support of\u00a0a taxpayer&#8217;s\u00a0FDA submissions can be used as audit support for their credit\u00a0claim.\u00a0\u00a0<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Get in touch with us if you think you have R&amp;D activities that might&nbsp;qualify for orphan drug or R&amp;D credits. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">To find out how to take full advantage of research tax credits that could cut your federal and state tax liability, <a href=\"https:\/\/taxops.com\/downloads\/pay-less-tax-invest-more-with-rd-credits\/\" target=\"_blank\" rel=\"noreferrer noopener\" title=\"Download, &quot;Pay less tax, invest more with R&amp;D credits&quot;\">download<\/a>&nbsp;&#8220;<em>Pay less tax, invest more with R&amp;D credits<\/em>&#8220;. Or, request a complimentary&nbsp;analysis of potential credits.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Let&#8217;s Talk Tax<\/h3>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\"><p><a rel=\"noreferrer noopener\" href=\"https:\/\/taxops.com\/team\/jamie-overberg\/\" target=\"_blank\">Jamie Overberg<\/a>\u00a0can be reached at joverberg@taxops.com or 720.227.0421.\u00a0<\/p><\/blockquote>\n\n\n\n<div style=\"height:62px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link\" href=\"https:\/\/taxops.com\/minimization\/contact\/\" target=\"_blank\" rel=\"noreferrer noopener\">Get in Touch<\/a><\/div>\n<\/div>\n\n\n\n<div style=\"height:62px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h3 class=\"wp-block-heading\">Latest Tax News<\/h3>\n\n\n<ul class=\"wp-block-latest-posts__list wp-block-latest-posts\"><li><a class=\"wp-block-latest-posts__post-title\" href=\"https:\/\/taxops.com\/auditor-independence-in-the-age-of-private-equity\/\">Auditor Independence in the Age of Private Equity: What CFOs Need to Know<\/a><\/li>\n<li><a class=\"wp-block-latest-posts__post-title\" href=\"https:\/\/taxops.com\/r-d-credits-for-software-companies\/\">R&amp;D Credits for Software Companies: Scrum Teams, Qualifiers, and Section 174 After OBBBA<\/a><\/li>\n<li><a class=\"wp-block-latest-posts__post-title\" href=\"https:\/\/taxops.com\/section-174-decoupling-what-tax-pros-need-to-know-state-by-state\/\">Section 174 Decoupling: What Tax Pros Need To Know State By State<\/a><\/li>\n<li><a class=\"wp-block-latest-posts__post-title\" href=\"https:\/\/taxops.com\/sean-espy-new-partner\/\">TaxOps Welcomes Sean Espy as Partner, Tax Minimization<\/a><\/li>\n<li><a class=\"wp-block-latest-posts__post-title\" href=\"https:\/\/taxops.com\/state-nexus-demystified-navigating-tax-compliance-after-wayfair-episode-1-2\/\">Your Tax Footprint Is Probably Bigger Than You Think: What Finance Leaders Need to Know About State Nexus<\/a><\/li>\n<\/ul>\n\n\n<div style=\"height:62px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<strong>Follow Us<\/strong><br>\n<a href=\"http:\/\/www.linkedin.com\/company\/201050\" target=\"_blank\" rel=\"noopener noreferrer\"><i class=\"fa fa-linkedin-square fa-2x\"><\/i><\/a>\n<a href=\"https:\/\/twitter.com\/taxops\" target=\"_blank\" rel=\"noopener noreferrer\"><i class=\"fa fa-twitter-square fa-2x\"><\/i><\/a> <a href=\"https:\/\/taxops.com\/prospects\/connect-with-us\/\" target=\"_blank\" rel=\"noopener noreferrer\"><i class=\"fa fa-envelope-square fa-2x\"><\/i><\/a>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Researching a rare disease? Get tax credit for that with the federal Orphan Drug Credit. By Jamie Overberg The orphan drug credit (ODC) is&nbsp;a federal tax credit available to&nbsp;companies working to find cures to&nbsp;rare diseases. It is&nbsp;not widely known&nbsp;but when claimed, provides taxpayers an opportunity to reduce the cost of R&amp;D.&nbsp;The research must meet R&amp;D [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":5046,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","spt_transcript":"","footnotes":""},"categories":[78,226,227],"tags":[525,48,548,50,564,52],"class_list":["post-5045","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-tax-savings","category-tax-news","category-white-papers","tag-orphan-drug-credit","tag-rd","tag-rare-disease","tag-research-credit","tag-research-tax-credit","tag-tax-credit"],"aioseo_notices":[],"jetpack_featured_media_url":"https:\/\/taxops.com\/wp-content\/uploads\/2020\/08\/Orphan-Drug-Credit.png","_links":{"self":[{"href":"https:\/\/taxops.com\/wp-json\/wp\/v2\/posts\/5045","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/taxops.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/taxops.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/taxops.com\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/taxops.com\/wp-json\/wp\/v2\/comments?post=5045"}],"version-history":[{"count":2,"href":"https:\/\/taxops.com\/wp-json\/wp\/v2\/posts\/5045\/revisions"}],"predecessor-version":[{"id":7034,"href":"https:\/\/taxops.com\/wp-json\/wp\/v2\/posts\/5045\/revisions\/7034"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/taxops.com\/wp-json\/wp\/v2\/media\/5046"}],"wp:attachment":[{"href":"https:\/\/taxops.com\/wp-json\/wp\/v2\/media?parent=5045"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/taxops.com\/wp-json\/wp\/v2\/categories?post=5045"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/taxops.com\/wp-json\/wp\/v2\/tags?post=5045"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}