Vaccines R&D Tax Credits

Advance world‑class innovation in vaccine research, development and manufacturing. Biotech and pharmaceutical companies in the U.S. developing new vaccines, reformulating existing ones, scaling manufacturing, or integrating adjuvants, delivery systems or novel platforms (mRNA, viral‑vector, nanoparticle) engage in high‑impact R&D. Many such initiatives satisfy the criteria for the federal R&D Tax Credit under IRC §41, with additional state‑level opportunities.

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Examples of qualifying activities in vaccine development

Platform & antigen innovation Designing novel vaccine platforms (mRNA, nanoparticle, viral‑vector), antigen engineering, side‑by‑side immunogenicity pilot studies.
Adjuvant/delivery system development Creating or testing new adjuvants, targeted‑delivery systems (inhalable, transdermal, nanoparticle), trialling new administration technologies.
Manufacturing scale‑up and process optimisation Pilot manufacturing runs, bioreactor optimisation, purification/upstream‑downstream process trials, fill/finish automation, cold‑chain stability modelling.
Assay/analytics method development Developing or validating assays for immunogenicity, neutralisation, potency, lot consistency; side‑by‑side comparator studies; validation of novel test methods.
Storage/transportation stability & accessibility trials Modelling stability under varied temperature/humidity, distribution simulation, shelf‑life extension studies, packaging for global distribution.

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What qualifies as R&D in vaccine development?

To qualify, your vaccine‑related activities must:

Aim at a permitted purpose — such as a new vaccine platform (mRNA, viral vector, nanoparticle), reformulation of an existing vaccine, novel adjuvant system, improved delivery/administration method, or manufacturing process innovation for scale.
Tackle technical uncertainty — for example: “Can the new delivery platform elicit the desired immunologic response while maintaining stability across storage/shipping conditions?”, “Will the scaled‑up manufacturing process of the antigen maintain potency and purity at required volumes?”, “Can a novel adjuvant/delivery system reduce dosing while maintaining efficacy and safety?”
Use a process of experimentation — antigen design and formulation trials, side‑by‑side adjuvant/delivery comparisons, manufacturing pilot runs, stability/accessibility studies, analytics and assay development.
Be technological in nature, grounded in immunology, molecular biology, nanotechnology, bioprocess engineering, formulation science or analytical chemistry.

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Qualified Research Expenses (QREs)

Expense Type

Examples in Vaccine R&D

Eligibility Notes

Wages

Immunologists, molecular biologists, vaccine formulation scientists, bioprocess engineers, analytics/test scientists

Direct research roles qualify

Supplies

Prototype antigens, novel adjuvants, nanoparticle materials, consumables or pilot runs, test kits, cold‑chain simulation materials

Materials consumed in experimentation

Software / Cloud

Simulation tools for bioprocess modelling, analytics for immunologic/PK data, stability modelling software

Eligible when used for qualified research

Contract Research

External labs for immunogenicity assays, CROs for pilot manufacturing, external packaging/transport modelling vendors

Subcontracted research costs generally qualify

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Roles commonly involved in qualifying activities

Immunologists, vaccine scientists, molecular biologists
Bioprocess and manufacturing engineers, formulation scientists
Analytical chemists, test/assay development scientists
Quality/regulatory scientists specialising in vaccine validation
Project managers coordinating pilot runs, formulation/antigen development and manufacturing scale‑up

What does not qualify

Routine vaccine manufacture under established platform without new development or experimentation
Distribution, marketing, standard site build‑out or general operations unrelated to R&D
Administrative, sales or logistical tasks without experimentation or technical uncertainty
Capital equipment purchases not tied to a documented research or trial process

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Compliance and Documentation

§174 Update

Following the One Big Beautiful Bill Act (OBBBA) signed July 4, 2025, §174 now allows immediate expensing of domestic research expenses for tax years beginning on or after January 1, 2025. Taxpayers may also elect optional amortization under new §174A. Foreign research expenses must still be amortized over 15 years. This is separate from the §41 credit but impacts overall tax planning.

Important records to maintain:

Project briefs outlining objectives (e.g., “Reduce dose by 50% while maintaining immunogenicity”, “Extend shelf‑life of antigen by 12 months under ambient conditions”), iteration logs of antigen/adjuvant designs, pilot‑run summary logs.
Manufacturing pilot logs, bioreactor trial runs, purification yield/impurity comparison data, fill/finish validation logs.
Assay method development logs, side‑by‑side immunogenicity/neutralisation data, stability/transportation test logs.
Employee time tracking tied to research tasks, supply and consumable usage linked to experimentation, iteration/version history including failed trials. Storing and structuring these records supports the four‑part test and strengthens the audit defence.

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Frequently Asked Questions

Do vaccine‑development companies qualify for the R&D Tax Credit?

Yes — when they engage in new or improved vaccine platforms, adjuvant/delivery system development, manufacturing scale‑up trials, assay/analytics development or stability/distribution innovation.

What expenses can be claimed?

Wages of scientists/engineers doing vaccine R&D, prototype antigens/adjuvants supplies, software/analytics tools, contract research for immunogenicity assays or pilot manufacturing.

Which activities do not qualify?

Routine vaccine production using an existing platform with no experimentation, standard distribution/logistic tasks, purely administrative or sales functions.

How should vaccine‑development teams document research?

Maintain logs of antigen/adjuvant trial iterations, manufacturing/pilot run data, assay development records, employee time by project, supply/test‑kit usage tied to experiments.