In order to reduce costs, meet environmental requirements, and develop products of the highest quality, manufacturers across the country are undertaking innovations in production, automation, and product quality. These innovations require significant investment in time and capital and with the right information manufacturers can now recoup many of these costs through local, state, and federal incentives.
The R&D Tax Credit can allow manufactures to increase cash flow, invest in expansion projects, and continue to grow their business. Examples of manufacturing activities that could qualify for the R&D Credit include:
- Developing new or improved processes to increase automation, improve product quality, or increase efficiency.
- Undertaking new production processes that are environmentally friendly.
- Designing new fixtures, tooling, or molds for prototyping.
- Engineering new machinery or equipment for a new product line.
Within manufacturing there are several industries that can take advantage of the credit, including aerospace/defense, agriculture, apparel/textiles, consumer products, electronics, heavy equipment, oilfield equipment, medical devices, and food processing.
For example, Company ABC is developing a second generation electronic device with added features and functionality. In order to develop the new product, Company ABC undertakes firmware development and component design. Furthermore, the Company needs to develop a new production line to manufacture various components of the device. In this case Company ABC can capture development costs from both the development of the new product as well as the development of the new production process.
Working directly with clients and their CPAs, TRCG has delivered R&D services to a wide spectrum of manufacturing companies. Through industry expertise, TRCG can quickly understand your company processes, identify potential qualifying projects, and help you capture valuable tax credits.