The consumer packaged goods (CPGs) manufacturing industry encompasses everything from children’s toys to toiletries to laundry detergent. Industry 4.0 (I4.0) has improved manufacturing efficiencies at every point along the continuum, from supply chain to production, packaging, and distribution. CPG manufacturers are constantly innovating to increase efficiencies, and the research and development (R&D) involved in improving the manufacturing process, from design to delivery, most likely qualifies for the R&D tax credit.
Employee wages, raw materials and supplies, cloud computer rental, 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:
Do you have these job titles on your payroll, or do you hire third-party contractors to do these jobs?
Benefits for the R&D Tax Credit vary from state to state. Get an accurate estimate of your potential state tax credit!