A “Project Information Memorandum” must accompany each application on Form 8942.  Even though Form 8942 isn’t yet available, the May 21st Notice lists the kind of detail that must be included in each Project Information Memorandum. The Notice prescribes word limits that apply to the Project Information Memorandum, so careful and concise drafting is essential. 

The Project Information Memorandum must include: (i) a description of the project and, if applicable, why any new therapy is novel (subject to a 250-word limit); (ii) identification of which of the Eligibility Criteria the project satisfies (subject to a 50-word limit) and which Selection Criteria apply (also subject to a 50-word limit); (iii) an explanation of the scientific rationale that supports the project’s intended outcome, including up to five citations to empirical research or scientific literature supporting this conclusion (subject to a 250-word limit); and (iv) a description of the project’s stage of development (subject to a 250-word limit), including FDA licensure requirements (if applicable), preclinical tests (if applicable), a summary of the extent of testing (if applicable) and the research and development strategy and schedule. 

The resources available for the project must be described, subject to a 250-word limit, addressing all of the following: (i) revenue levels for the project over the previous three years; (ii) revenue levels and sources of funds to finance the research and development plan; (iii) any major public or private investment or strategic partnerships; and (iv) any suspensions of the project’s operations, and whether the suspension is temporary or permanent.

Taxpayers must submit a separate application for each project.  The amount of the Tax Credit/Grant awarded to a single taxpayer is limited to a maximum of $5 million per year, regardless of the number of projects. 

The narratives that taxpayers provide will play the key role in determining who receives the Tax Credit/Grant. If you intend to apply for a Tax Credit/Grant, you should begin drafting your narratives now, to allow time for refining it over the next few weeks. Words are at a premium in this application, so strong, concise writing should be a major advantage to any applicant. 

The foregoing description of the application process is an overview of what Treasury is requiring to apply for the Tax Credits and is not intended to include all of the application details. If you would like more information, would like to discuss the application process, or need help in developing your Tax Credit application, please contact one of the listed attorneys.