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:
Do you have these job titles on your payroll, or do you hire third-party contractors to do these jobs?
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.
Average amount of total manufacturing expenses that typically qualify
Single-year credit for OEM part manufacturer: $1M of raw materials/25 CNC technicians
The amount qualified startups can offset payroll taxes per year
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Benefits for the R&D Tax Credit vary from state to state. Get an accurate estimate of what your potential state tax credit!