Manufacturing R&D Tax Credit
A significant portion of R&D tax credits go to manufacturers — but the diversity of segments makes them easy to miss. Our specialization team makes sure you don't.
Built for the Way Manufacturers Work
A significant portion of R&D tax credits are given to the manufacturing industry. But the diversity of manufacturing segments makes it difficult to determine whether R&D tax credits are applicable. All manufacturers should discuss their business with an R&D tax specialist such as Apex Advisors.
Many manufacturing and distribution firms are not aware that the government has enacted tax changes that help them recover cash based on activities most consider day-to-day operations. Efforts to design and develop products and processes for optimal performance and efficiency can entitle a manufacturer to generous R&D tax credits.
Segments We Serve
Examples of Qualifying Manufacturing Activities
- Manufacturing products
- Developing new, improved or more reliable products, processes, or formulas
- Designing tools, jigs, molds and dies
- Developing prototypes, models and samples (including computer-generated models)
- Developing patents
- Adding new equipment (labor and engineering cost aspects)
- Testing new concepts and technology
- Attempting the new use of materials and compounds
- Performing testing, including environmental testing
- Developing, implementing or upgrading systems and/or software
R&D Tax Credits in the Manufacturing Industry
R&D tax credits are concerned with activities, not just allocated R&D budgets. Qualified activities generally start at the point of initial product development and continue through testing. Once a product has been finalized and put into production, R&D no longer applies.
Manufacturing Case Examples
| Client | Employees | Revenue | Total Credit |
|---|---|---|---|
| Client A | 51 | $7,326,000 | $53,000 ** |
| Client B | 190 | $15,913,000 | $166,000 ** |
| Client C | 279 | $74,006,000 | $280,000 ** |
** Federal & State credit combined.
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