Fillable Form 8820 - Orphan Drug Credit (Page 2 of 2) in pdf

Form 8820 (Rev. 12-2008)

Page

Specific Instructions

The above determinations are made

Paperwork Reduction Act Notice. We

ask for the information on this form to

as of the date the drug is designated

Figure any orphan drug credit from your

under Act section 526.

carry out the Internal Revenue laws of the

own trade or business on lines 1 and 2a.

United States. You are required to give

Testing Not Eligible for the

us the information. We need it to ensure

Line 2a

Credit

that you are complying with these laws

and to allow us to figure and collect the

Reduce the deduction for qualified

The credit is not allowed for clinical

right amount of tax.

clinical testing expenses otherwise

testing conducted outside the United

allowable on your income tax return by

You are not required to provide the

States unless there is an insufficient U.S.

the amount of the credit shown on line

information requested on a form that is

testing population and the testing is

2a. If the credit exceeds the amount

subject to the Paperwork Reduction Act

conducted by a U.S. person or by

allowed as a deduction for the tax year,

unless the form displays a valid OMB

another person not related to the

reduce the amount chargeable to the

control number. Books or records

taxpayer. Testing conducted either

capital account for the year for such

relating to a form or its instructions must

inside or outside the United States by a

expenses by the amount of the excess.

be retained as long as their contents may

corporation to which section 936 applies

See section 280C(b) for special rules.

become material in the administration of

is not eligible for the orphan drug credit.

any Internal Revenue law. Generally, tax

Line 2b

Coordination With the

returns and return information are

confidential, as required by section 6103.

Research Credit

If the credit on line 2a includes wages

paid to employees, and you are also

The time needed to complete and file

Qualified clinical testing expenses used

claiming a credit for employer differential

this form will vary depending on

to figure the orphan drug credit cannot

wage payments based on wages paid to

individual circumstances. The estimated

also be used to figure the credit for

the same employees, enter on line 2b the

burden for individual taxpayers filing this

increasing research activities. However,

portion of the credit from the employer

form is approved under OMB control

any of these expenses that are also

differential wage credit line (e.g., line 2 of

number 1545-0074 and is included in the

qualified research expenses must be

Form 8932) that is attributable to wages

estimates shown in the instructions for

included in base period research

that were also used to figure the credit on

their individual income tax return. The

expenses when figuring the credit for

line 2a.

estimated burden for all other taxpayers

increasing research activities in a later

who file this form is shown below.

tax year.

See Form 8932, Credit for Employer

Differential Wage Payments, for

Recordkeeping

1 hr., 54 min.

Member of Controlled Group

information on the credit.

Learning about the

or Business Under Common

law or the form

1 hr.

Line 5

Control

Preparing and sending

Allocate the orphan drug credit on line 4

the form to the IRS

1 hr., 4 min.

For purposes of figuring the credit, all

between the estate or trust and the

If you have comments concerning the

members of a controlled group of

beneficiaries in the same proportion as

corporations (as defined in section

accuracy of these time estimates or

income was allocated and enter the

suggestions for making this form simpler,

41(f)(1)(A) and (f)(5)) and all members of a

beneficiaries’ share on line 5.

we would be happy to hear from you.

group of businesses under common

See the instructions for the tax return

control (as defined in section 41(f)(1)(B)),

with which this form is filed.

are treated as a single taxpayer. As a

member, compute your credit based on

your proportionate share of qualified

clinical testing expenses giving rise to the

group’s orphan drug credit. Enter your

share of the credit on line 2a. Attach a

statement showing how your share of the

credit was figured, and write “See

Attached” next to the entry space for

line 2a.

Form 8820 - Orphan Drug Credit Page 2

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