R&D Tax Credits for the Aerospace Industry

Refunds are available for companies performing research within the Aerospace Industry. The research credit provides dollar-for-dollar cash savings each year for companies performing activities related to the development of new or improved products and processes. These benefits could provide much needed cash to hire additional employees, increase R&D, expand production facilities, etc.

Many companies involved with aerospace are unaware that their efforts within designing and developing their products can yield a large amount of research credits. Examples of R&D activities related to the industry as well as potentially qualifying job titles are listed below.

Examples of Qualifying R&D Activities

• Computer-aided design (CAD), modeling, and finite element analysis (FEA) simulation of aerospace products
• Designing and testing of prototypes of aerospace products
• Designing of new concepts of aerospace products to increase performance and reliability
• Optimizing manufacturing processes for aerospace products
• Testing aerospace components to meet regulatory standards and safety requirements

Potentially Qualifying R&D Job Titles

• Aerospace Engineer
• CAD Designer
• Chemical Engineer
• Electrical Engineer
• Engineering Manager
• Engineering Director
• Mechanical Engineer
• Project Manager
• Systems Engineer
• Software Engineer
• Structural Engineer

AMT Offset

For tax years beginning after December 31, 2015, eligible small businesses (those with $50 million or less of gross receipts) may claim the research credit against AMT liability. ​​​​​​​

Up to $250,000 in Payroll Tax

Qualified start-up companies may elect to use up to $250,000 of the research credit against payroll taxes. Treasury Regulations have substantially broadened the range of taxpayers who are eligible for the credit. Start-ups to publicly traded businesses who were previously unable to realize a benefit from this lucrative tax credit should reassess their eligibility.