The aerospace and defense industries are driven by research and development (R&D), and employees in these sectors create novel products and produce cutting-edge prototypes. This need for continuous experimentation and innovation makes these two industries primed to receive large tax incentives through 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 industries have claimed significant R&D tax credits and received millions in additional capital to reinvest into their workforce, infrastructure, and continued innovation:
Firearms, Ammunition, & Missile Defense
Government Contractors
Jet Propulsion / Rocketry
Satellite Technology
Space Exploration
Example activities that qualify:
- Designing (or improving) novel aircraft, unmanned aerial vehicles, parts, coatings, surface treatments, etc.
- Manufacturing, testing, and validating initial prototypes and first articles
- Implementing automated processes and design of robotics systems
- Creating new defense munitions and/or defense system hardware
- Improving missile navigation systems
- Developing advanced communications infrastructure
- Creating novel command and control software
Do you have these job titles on your payroll, or do you hire third-party contractors to do these jobs?
- Aeronautical / Materials / Electrical / RF Engineers
- CAD/3D Modeling Design Engineers
- C-Suite
- Data Scientists
- Operations Technicians
- Product Managers
- Quality Assurance Analysts
- Systems Analysts
- Systems Architects or Engineers
- Technical Directors
Unsure of whether your aerospace or defense projects qualify? The innovations your company has been working on may be eligible for significant tax breaks. STRIKE Advisory, LLC employs tax experts with years of experience in R&D Tax Credits. At STRIKE, we work on a success-based fee structure enabling businesses in the aerospace and defense industries 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 your tax 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.
Journal articles linked to this page:
A Tactical Approach to R&D Tax Credits for Defense Contractors
