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nonqualified nonrecourse financing

c. To significantly advance the goal of

above, before the partnership or the

related to the property as of the close of

curing cancer within the 30-year period

pass-through entity may apply for a

the tax year in which the property is

beginning on May 21, 2010; and

QTDP grant.

placed in service. Generally, if the

3. The IRS determines that the

The QTDP Program uses the Payment

applicant is a partnership or S

applicant’s project is among those

Management System for payment of

corporation, whether any financing is

projects that have the greatest potential:

grants. Therefore, notwithstanding Notice

non-qualified nonrecourse financing is

a. To create and sustain (directly or

2010-45, section 8.02(4), an applicant

determined at the partner or shareholder

indirectly) high quality, high-paying jobs in

electing to request a QTDP grant need

level.

the United States; and

not register with the Central Contractor

b. To advance United States

If, at the close of a tax year following

Registration. The IRS will send applicants

competitiveness in the fields of life,

the year property was placed in service,

the forms necessary to process grant

biological, and medical sciences.

the nonqualified nonrecourse financing for

payments.

any property has increased or decreased,

Consistency requirement. An election

then the credit base for the property

A certification and allocation by the

for a QTDP grant will be effective only if

changes accordingly. The changes may

IRS is not a determination that the costs

an applicant makes the same election on

result in an increased QTDP credit (but

described in the application were or will

all the applicant’s applications for that tax

not greater than 50% of the qualified

be, in fact, paid or incurred or that the

year. If the applicant’s applications are

investment that was certified) or a

costs were or will be necessary for and

inconsistent, then the election for a QTDP

recapture of the QTDP credit or grant in

directly related to the conduct of a

grant will be invalid and the applicant will

the year of the change. See sections 49

qualified therapeutic discovery project

be considered for certification of a credit

and 465 for details.

under section 48D(b).

only. The applicant may file an amended

Eligible Taxpayer

Project Information

Form 8942 requesting a QTDP grant for

Memorandum

the inconsistent project, thus making all

An eligible taxpayer is a taxpayer who

elections for a QTDP grant for the same

employs not more than 250 full-time and

The Project Information Memorandum is

year effective.

part-time employees in all businesses of

an HHS form the applicant must complete

the taxpayer at the time the application is

and file with Form 8942 as part of a

When to File

filed. In figuring the number of full-time

complete application for certification.

and part-time employees, do not include

File Form 8942 on or before July 21,

leased employees. In determining the

HHS will review the Project Information

2010. Applications filed after July 21,

number of employees, include the

Memorandum to determine whether a

2010, will not be considered.

employees of all members of the following

project meets the definition of qualifying

that the applicant is a member of:

therapeutic discovery project and whether

Applications will be deemed submitted

•

A controlled group of corporations

the applicant has demonstrated that its

on October 1, 2010, for purposes of

(defined in section 52(a));

project shows a reasonable potential to

48D(d)(2)(B) only. For all other purposes,

•

A group of trades or businesses under

meet one or more of the goals referred to

the application date will be the date the

common control (defined in section

in item (2) under Certification of Qualified

application is filed as determined under

52(b)); and

Investment, above.

section 7502.

•

An affiliated service group (defined in

The Project Information Memorandum

section 414(m)).

Private Delivery Services

form is available at

A corporation is a member of a controlled

Applicants can use certain private

grants/funding/QTDP_PIM/index.htm.

group of corporations if it is a member of

delivery services designated by the IRS to

either a parent-subsidiary group (defined

Election of a Grant in Lieu of a

meet the “timely mailing as timely filing”

in section 1563(a)) or a brother-sister

rule under section 7502. These private

Credit

group (defined in section 1563(a), except

delivery services include only the

that ‘‘more than 50%’’ is substituted for

Generally, an applicant may elect to treat

following.

‘‘at least 80%’’ each place it appears in

the application for certification of qualified

•

DHL Express (DHL): DHL Same Day

section 1563(a)(1)), even if it is an

investment for a QTDP credit as a

Service.

excluded member for purposes of being a

request for a QTDP grant in lieu of a

•

Federal Express (FedEx): FedEx

component member of a controlled group

QTDP credit. However, the following

Priority Overnight, FedEx Standard

(for example, a foreign corporation

types of entities are not eligible for a

Overnight, FedEx 2Day, FedEx

subject to tax under section 881).

QTDP grant.

International Priority, and FedEx

1. Any Federal, state, or local

Certification of Qualified

International First.

•

government (or any political subdivision,

United Parcel Service (UPS): UPS Next

Investment

agency, or instrumentality thereof).

Day Air, UPS Next Day Air Saver, UPS

The IRS will determine whether to certify

2. Any organization described in

2nd Day Air, UPS 2nd Day Air A.M., UPS

an applicant’s qualified investment for a

section 501(c) and exempt from tax under

Worldwide Express Plus, and UPS

qualifying therapeutic discovery project

section 501(a).

Worldwide Express.

under the qualifying therapeutic discovery

3. An entity referred to in section

project program, for which an application

The private delivery service can tell the

54(j)(4), including:

has been filed, only if:

applicant how to get written proof of the

a. A clean renewable energy bond

mailing date.

1. HHS determines that the

lender,

applicant’s project is a qualifying

b. A cooperative electric company, or

Where to File

therapeutic discovery project;

c. A governmental body.

2. HHS determines that the

4. Any partnership or other

File Form 8942 by United States mail,

applicant’s project shows reasonable

pass-through entity, any partner or other

private delivery service, or hand delivery

potential:

holder of an equity or profits interest of

(between the hours of 8 a.m. and 4 p.m.

a. To result in new therapies:

which is described in (1), (2), or (3),

EST, Monday through Friday) to:

above.

i. To treat areas of unmet medical

Internal Revenue Service

need, or

ii. To prevent, detect, or treat chronic

A partnership or other pass-through

201 W. Rivercenter Blvd.

or acute diseases and conditions;

entity must determine if any of its partners

Stop 5701G

b. To reduce long-term health care

or other holders of any equity or profits

costs in the United States; or

interest is described in (1), (2), or (3),

Covington, KY 41011.

-2-

Instructions for Form 8942 (June 2010)

Instructions For Form 8942 - Application For Certification Of Qualified Investments Eligible For Credits And Grants Under The Qualifying Therapeutic Discovery Project Program Page 2

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