Manufacturing

As Industry 4.0 gains traction, manufacturers are implementing technology and big data solutions to streamline supply chain, production, and distribution. However, there is still a general misconception in manufacturing that improving these processes does not qualify as research and development (R&D).

If your manufacturing company is increasing efficiencies, investing in green manufacturing, or overcoming technical obstacles to solve a problem, there is a strong likelihood that your costs can be offset by the R&D tax credit. In addition to the federal credit, many states offer tax breaks. Pre-revenue companies and start-ups with less than five years of revenue can use the federal R&D tax credits to offset future payroll taxes.

The following manufacturing industries have claimed significant R&D tax credits. As a result, they've received millions in capital to reinvest in their workforce, infrastructure, and continued innovation:

Example R&D activities that qualify:

• Designing and developing alternative processes to improve cost-effectiveness and enhance throughput
• Prototype development and testing
• Evaluating new materials to impart improved functionality or performance
• Creating novel equipment involved in a particular product, process, or service
• Developing new, more environmentally-friendly products
• Making the manufacturing process more energy efficient
• Designing and implementing lean manufacturing processes
• Computer Aided Design (CAD) and 3D modeling
  

Do you have these job titles on your payroll, or do you hire third-party contractors to do these jobs?

• C-Suite
• Chemical Engineers
• Designers
• Electrical Engineers
• General / Plant Managers
• Industrial Engineers
• IT Specialists
• Mechanical Engineers
• Operations / Production Managers
• Process Engineers
• Quality Control Engineers
• Software Engineers

Unsure of whether your manufacturing processes or product development qualifies? The innovations your company has been working on may be eligible for significant tax breaks. Strike Tax Advisory employs tax experts with years of experience in R&D tax credits. Our tax experts understand the complexities of manufacturing research and development so that you can enjoy significant tax benefits from the activities you already engage in.

At Strike, we work on a success-based fee structure enabling businesses in the manufacturing industry to claim R&D credits/refunds without any out-of-pocket costs. We offer complete audit protection and a money-back guarantee. Use our R&D Tax Calculator to estimate your potential benefit, and partner with Strike to claim the credits with no up-front costs. Contact one of our experts today. 

The R&D Tax Credit was created to incentivize companies across multiple industries to keep high-tech jobs in the United States. Companies can claim employee wages, supplies & raw materials, computer rental costs, and third-party contractor expenditures incurred throughout the R&D process. Current law permits companies to amend prior-year tax returns (going back three years), offering additional financial benefits from tax refunds. If you cannot use the R&D credits immediately, the IRS allows taxpayers to carry credits forward up to 20 years.

Resources

Manufacturing Expenses that Qualify for the R&D Tax Credit

Four Reasons Contract Manufacturers Should Be Claiming the R&D Tax Credit