To qualify, activities must:
Qualified Research Expenses (QREs)
The IRS allows several categories of Qualified Research Expenses (QREs):
Expense Type
Examples in Row Crops
Eligibility Notes
Wages
Agronomists, farm managers, trial coordinators
Direct, supervisory, and support roles qualify
Supplies
Seed, fertilizer, prototypes, field sensors
Must be consumed in the research process
Software / Cloud
Data analysis tools, yield mapping platforms
Eligible if used for qualified research
Contract Research
University or lab field trials
65% of eligible costs may be claimed
Compliance and Documentation
§174 Update
Following the One Big Beautiful Bill Act (OBBBA) signed July 4, 2025, §174 now allows immediate expensing of domestic research expenses for tax years beginning on or after January 1, 2025. Taxpayers may also elect optional amortization under new §174A. Foreign research expenses must still be amortized over 15 years. This is separate from the §41 credit but impacts overall tax planning.
Documentation requirements remain unchanged. Maintain clear records of:
Frequently Asked Questions
Do farmers qualify for the R&D Tax Credit?
Yes. Farmers and agribusinesses can qualify if they engage in systematic testing or trials that resolve technical uncertainty, not routine operations.
What expenses can be claimed?
Wages, supplies, cloud software, and a portion of contract research directly related to qualified R&D activities.
Which crops are eligible?
Common row crops such as corn, wheat, soybeans, and cotton can qualify when growers test new methods or technologies.
What activities do not qualify?
Routine farming, post‑discovery production, and non‑technical tasks such as sales or general management.
How much can row crop farmers typically save?
Savings vary by farm size and scope of activities. Industry reports suggest many row crop operations see $50,000 to $200,000 in annual credits when research activities are properly documented.
How should farmers document research?
Maintain side‑by‑side trial data, soil and yield records, equipment logs, and employee time allocations to support claims under IRS audit guidelines.
Next Steps
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Manufacturing
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With just a little info, our Strike Experts can help you start your R&D tax credit journey.
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Innovations in the electronics design and manufacturing industry affect almost all aspects of our lives and the economy, including energy production, artificial intelligence, automobile safety and comfort, connectivity (IoT, the “Internet of Things), healthcare, and many others. Substantial investments in research and development (R&D) are needed to create sensors, micro- and nanoelectronics, optical instruments, printed circuit boards (PCBs), and other advanced technologies. A portion of these costs can be offset or recouped by claiming 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 (or third-party contractor) operates.
Examples of qualifying activities:
- Experimenting with novel assembly/production strategies to reduce costs and improve efficiencies
- Designing sensors with increased sensitivity
- Developing PCBs with new functionalities or capabilities
- Testing nanoelectronic materials (e.g. carbon nanotube, graphene) for use in novel applications
- Developing components that improve speed, connectivity, or integration
- Creating prototypes or first articles
Do you have these job titles on your payroll, or do you hire third-party contractors to do these jobs?
- C-Suite
- Computer-aided Design (CAD) Personnel
- Control Engineers
- Data Scientists
- Electrical / Electronics Engineers
- Electrical Engineering Technicians
- Manufacturing Process Engineers
- Production Managers
- Software Developers
Use our R&D Tax Calculator to estimate your potential benefit, and partner with Strike to claim your tax benefits with no up-front costs. Contact one of our experts today.
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Related Sub-Industries
Does your state qualify for the State R&D Tax Credit?
Benefits for the R&D Tax Credit vary from state to state. Get an accurate estimate of your potential state tax credit!
How much could I get back for
Electronics
?
Great question! Try out our R&D Tax Credit Calculator to see the value of your R&D tax credit reward.
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