R&D Tax Credits for the Food & Beverage Industry

Refunds are available for companies performing research within the Food & Beverage 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 food & beverages 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

Related to the development of new or improved:

Food product formulations to achieve specified analytical requirements, including those related to pH level, brix level, acid content, and product viscosity
Ingredients and/or formulations
Packaging, canning, or redesigning existing packaging (e.g., eco-friendly: biodegradable, recyclable; portable: grab-and-go, drinkable, increase shelf-life)
Production process specifications and techniques for new food products, including mixing times, batching sequences, and cooking temperatures
Production processes for efficiency and waste reduction
Testing product designs to reduce costs, meet new federal/state/local health regulations, ensure consistency, or improve shelf life

Potentially Qualifying R&D Job Titles

Biologist
Chemist
Enologist
Food Scientist
Food Technologist
Food/Beverage Formulator
Manufacturing Engineer
Packaging Engineer
Product Development Associate
Quality Assurance (QA) Technician

AMT Offset up to $250,000 in Payroll Tax

Eligible small businesses (those with $50 million or less of gross receipts) may claim the research credit against AMT liability. In addition, qualified startup 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.

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R&D Tax Credits for the Food & Beverage Industry

Examples of Qualifying R&D Activities

Potentially Qualifying R&D Job Titles

AMT Offset up to $250,000 in Payroll Tax

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