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A BioStrategy Partners program providing a continuum of services and infrastructure to emerging and early-stage life science companies in the Philly North community
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KIZ Tax Credit
Eligible life science, life science-related, and technology companies operating in the BioLaunch611+ KIZ territory may be eligible for up to $100,000 of KIZ Tax Credits.  These innovative tax credits can be used to offset a Pennsylvania tax liability (CS/FF, PIT, CNI) or they can be sold for CASH to grow your business.

Your company may qualify for this tax credit in the BioLaunch611+ KIZ if it is:

  • Operating within the designated BioLaunch611+ KIZ territory;
  • A life science, life science-related, and/or a technology company;
  • In operation for less than 8 years based on incorporation date of the company; and,
  • If your company has increasing gross revenues from the sale of products or services and/or grants (ex. SBIR, WEDNet, CJT, IWT) from any source in two consecutive years that is attributable to your location in the BioLaunch611+ KIZ. 

 

Important Dates:

  • Apply Applications due each year by – September 15th
  • Awards are announced each year with a letter from the Commonwealth of Pennsylvania, Department of Community and Economic Development – around December 15th

Applying:
To obtain your KIZ tax credit award (apply application) you will need to review the increase in the gross revenues in the comparable year (the year prior to the application year) over the base year (two years prior to the application year).
If you have an increase in gross revenues attributable to the KIZ then you will need to complete the online application available at www.newpa.com by going to the Single Application for Assistance to complete an application.  (To calculate an estimated tax credit amount, take the comparable year’s gross revenues including property and payroll factor calculations minus the base year’s gross revenues including property and payroll factor calculations and multiply by 50%.)

The maximum KIZ tax credit awarded each year is $100,000.
Companies must complete semiannual KIZ Force Reporting to be eligible to receive the KIZ tax credit.

Selling:
To sell the awarded KIZ tax credit, a company must file its state and federal tax returns.  The KIZ tax credit can be used to offset your tax liability or you can sell any unused tax credit for cash by completing a sales transfer application.

Research and Development Tax Credit

BioLaunch611+ KIZ companies that have qualified research and development (R&D) expenditures may be entitled to apply for another sellable credit – the Pennsylvania R&D Tax Credit.  This tax credit can also be used to offset PA tax liability or sold for cash.

Your company may qualify for the Pennsylvania R&D Tax Credit if:

  • It has qualified research expenditures (QREs) as defined in Section 41(B) of the Internal Revenue Code of 1986, incurred for PA qualified research and development conducted within the Commonwealth of Pennsylvania;
  • It has QREs from the current year and at least one preceding year (i.e., your company’s base year cannot have $0 QREs); and,
  • There was an increase in QREs from the preceding year(s) to the current year.

To Apply for the R&D Tax Credit:

1. Obtain a copy of the Pennsylvania Research and Development Tax Credit Application, Form (REV-545) which can be found each year on the  PA Department of Revenue website.

2. Your PA R&D Tax Credit application amount will be for a percentage of your company’s (2011 QREs less [the greater of ½ of your 2010 QREs vs. the average of the QREs for 2009, 2008, 2007, 2006]). The percentage will be:

  • 20% of this increase for companies with $5 million in assets or less
  • 10% of this increase for companies with over $5 million in assets.

3. Submit the PA R&D tax credit application no later than September 15th.

4. You will receive your PA R&D Tax Credit Award on about December 15th.

To Sell the R&D Tax Credit:

These credits can be used to offset a tax liability or any unused tax credits can be sold for cash through the PA Department of Community and Economic Development’s Research and Development Tax Credit Assignment Program.

 
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