Therapeutics, devices, diagnostics, biotech, life sciences is R&D at its core. And for pre-revenue companies, the payroll offset can turn the credit into cash now. Few incentives fit an industry better.
Request a Complimentary AssessmentLife sciences companies develop, formulate, prototype, and test under deep technical uncertainty, exactly what the credit is designed for. And because so many are pre-revenue, the payroll offset lets them monetize the credit before they ever owe income tax.
Prototyping and testing successive designs to meet a clinical and regulatory target.
Developing a stable, deliverable formulation through iterative testing.
Building and validating a new diagnostic method.
Life sciences work is often grant- or investor-funded, and funded research, where another party bears the risk and retains rights, can be excluded. Company-funded development generally qualifies. And because most of these companies are pre-revenue, the credit’s real value usually comes through the payroll offset, up to $500,000 a year against payroll taxes.
A new or improved therapeutic, device, diagnostic, or method.
Grounded in biology, chemistry, engineering, and computer science.
It was uncertain whether the approach would be safe, effective, or feasible.
Resolved through preclinical work, testing, validation, and iteration.
Very, through the payroll offset, you can apply up to $500,000 a year against payroll taxes before you’re profitable.
Funded research may be excluded depending on who bears the risk and retains rights. Company-funded work generally qualifies; we review the terms.
Much technical development around trials can qualify, though it’s fact-specific. We scope it carefully with the funding rules in mind.
This page is general information, not tax or legal advice. Whether specific activities and expenses qualify depends on the taxpayer’s facts and applicable law, and is determined through the appropriate R&D study. Novaric does not guarantee eligibility, credit amounts, or any IRS outcome.