The U.S. is a global leader in chemical production. According to the EPA, as of 2019 there were more than 3,400 chemical manufacturing facilities in the U.S. In 2017, the industry had $765 billion in sales and invested almost $100 billion in research and development (R&D). Costs associated with new formula creation, production processes, scale-up procedures, and other innovations can be recouped through the R&D Tax Credit.
Employee wages, raw materials and supplies, cloud computing, and third-party contractor costs associated with R&D activities are considered qualified research expenses (QREs). Companies can receive refunds of up to 22% of total QREs through federal and state tax credits, depending on the state in which your business operates.
Examples of qualifying activities:
- Creating and testing new formulations and products
- Experimenting with new additives or stabilizers to improve product quality
- Improving existing procedures to comply with required regulations, certifications, and standards
- Designing and implementing new equipment to improve manufacturing processes
- Creating new 3D printing technology using novel materials or compounds
- Testing and implementing environmentally-friendly manufacturing processes
- Evaluating applications for new chemical compounds
Do you have these job titles on your payroll, or do you hire third-party contractors to do these jobs?
- Chemical Engineers
- Environmental Engineers
- Laboratory Technicians
- Manufacturing Engineers
- PhDs / Postdoctoral Fellows
- Process Engineers
- Quality Assurance (QA) Personnel