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Clinical Trials R&D Tax Credits

Your discovery must go from the lab to a first-in-human clinical trial to get the FDA’s clearance, which can significantly affect your budget. That said, the majority of expenses incurred in getting the medication ready for clinical trials and subsequent human testing are regarded as qualifying research expenses. In other words, phase I–IV studies that are carried out internally or by outside contractors qualify for a tax reduction.

Therefore, as long as your business pays for the R&D activities, has the intellectual property rights to the findings, and conducts the clinical trials in the United States, your expenses are considered QREs. Thanks to the R&D tax credit in the Clinical Trials industry, you can offset as much as 22% of such expenditures, but the percentage can vary based on the US state you operate in.

Qualifying Costs and Activities

This incentive can recoup a portion of what you invested in supplies, materials, and subcontractors. It can also offset some research-related jobs like research coordinators and nurses, clinical trial coordinators, clinical pharmacologists, principal investigators, C-suite, data managers, physicians, and pharmacists.

As mentioned, claiming the Clinical Trials research and development tax credit requires you to invest in certain qualifying activities. These include but are not limited to:

  • Creating and producing a novel biologic, drug, or compound;

  • Developing and incorporating new software tools to aid clinical trials;

  • Examining trial outcomes, such as bioavailability, pharmacodynamics, pharmacokinetics, and so on;

  • Using a CRO to find, evaluate, and enroll patients for clinical trials;

  • Completing Phase IV studies to ascertain a drug’s long-term effects.

Contact our experts if you encounter any issues during the application procedure for the Clinical Trials R&D tax credit. We can answer all your questions, assist you until you receive an approval letter, and even offer a quote free of charge.



What kind of companies can apply?

Companies that:

  • Conduct qualifying R&D activities,

  • Have the intellectual property rights to the findings, and

  • Conduct clinical trials in the United States.

What data do I need to calculate credit?

Claim period gross receipts.

What information do I need to provide?

General ledger expense detail, payroll records, project notes, project lists, emails, purchase orders, and other documents regarding QREs for the claiming period.

Is credit carryforward an option?

Yes, up to twenty years.

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