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

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.