Small U.S. drugs and biomedical research firms will have a one-month window to apply for a new $1 billion tax credit for research into new therapies, according to guidance issued by the U.S. Treasury Department on Friday.
The two-year tax credit, created under this year's landmark health care legislation championed by President Barack Obama, aims to accelerate research into new therapies and projects that reduce medical costs.
Firms with less than 250 employees can apply for the credit, which covers up to 50 percent of qualifying research costs up to $5 million annually, from June 21 to July 21, the Treasury said. The credits can be applied to expenses incurred in 2009 and 2010.
Decisions on qualifying projects, which will be evaluated by the Department of Health and Human Services, will be issued by Oct. 29, the Treasury said.
"This new tax credit will help advance research to find life-saving treatments and help U.S. companies lead the way in innovative medical discoveries," Treasury Secretary Timothy Geithner said in a statement.