R&D Tax Credits for the Foundry Industry

Refunds are available for companies performing research within the Foundry 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 foundries 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

• Designing for tight tolerances new to the company
• Designing for harsh climates
• Improving the metal casting process including melting, coating and heat treatment; casting, molding and welding techniques; pollution control, waste and furnace charging systems; new gating and riser designs; reduce or recycling excess coating
• New product development including improving strength, stress tolerances, durability or service life
• New technologies related to filtration processes, pouring techniques, temperature control and measurement, monitoring metallurgical process performance, flow control, mold and coating materials, binder materials

Potentially Qualifying R&D Job Titles

• Computer Numerically Controlled (CNC) Programmers
• Foundry Process Control Technicians
• Foundry Workers
• Heat Treatment Supervisors
• Manufacturing Engineers, Supervisors
• Melt Deck Supervisors
• Pattern Makers
• Welders

AMT Offset up to $250,000 in Payroll Tax

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. In addition, 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 eligibilities.