Get Form 8820

Congress passed the Orphan Drug Act of 1983 to stimulate the development of drugs for rare diseases. A rare disease is defined as a disease that affects fewer than 200,000 people in the United States.

If you have children and a low tax bill, you may need IRS Form 8812 to claim all of your Child Tax Credit.

Orphan drug designation qualifies sponsors for incentives including: Tax credits for qualified clinical trials. Exemption from user fees. Potential seven years of market exclusivity after approval.

An individual regularly carries on a trade or business for purposes of being an eligible self-employed person if he or she carries on a trade or business within the meaning of section 1402, or is a partner in a partnership carrying on a trade or business, within the meaning of section 1402.

Use this form to figure and claim the orphan drug credit and elect the reduced credit under Section 280C.

Use Form 8820 to claim the orphan drug credit. The credit is 50% of qualified clinical testing expenses paid or incurred during the tax year. See section 45C and Regulations section 1.28-1 for details.

What Is the Orphan Drug Credit? The orphan drug credit is a federal tax credit that gives pharmaceutical companies incentives to develop medications and treatments for rare diseases that affect small populations. The credit is designed to help pharmaceutical companies lower their developmental costs.

Use Schedule 8812 (Form 1040) to figure your child tax credits, to report advance child tax credit payments you received in 2021, and to figure any additional tax owed if you received excess advance child tax credit payments during 2021.

Examples of orphan drugs include: Ivacaftor: A therapy to treat cystic fibrosis, a genetic disorder that causes problems with breathing and digestion and affects about 30,000 Americans. : A treatment for Gaucher disease, which causes pain and damage to tissue in the liver, spleen, lungs and bone marrow.