R&D Tax Credits for the Manufacturing Industry

Refunds are available for companies performing research within the manufacturing 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 manufacturing companies 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

Determining tooling requirements and optimal placement of equipment
Developing new or improved quality assurance testing processes
Developing processes that meet stringent regulatory requirements
Developing prototypes using computer-aided design (CAD) and computer-aided manufacturing processes
Developing robotics and automated technology
Experimenting with new or improved filling and packaging techniques
Improving strength, durability, and service life
Maximizing feeds/speeds while ensuring quality and integrity of the part
Improving processes including filling and sealing of products, packaging, die design/techniques, minimizing environmental impact (waste control and recycling), and flexibility and agility due to increased product volume and diversity

Potentially Qualifying R&D Job Titles

Computer Numerically Controlled (CNC) Operator
Computer-Aided Design (CAD) Technician
Design Engineer
Director of Operations
Machinists
Manufacturing Engineer Packaging Engineer
Plant Operator
Process Engineer
Production Manager
Quality Assurance (QA) Manager
Reliability Engineer
Test Engineer

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.

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R&D Tax Credits for the Manufacturing 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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