Product engineering builds and tests prototypes for new and existing products. In research and development (R&D), engineers collaborate with development and production teams to ensure quality assurance of physical materials such as molds, jigs and dies. If your company dedicates substantial resources towards improving engineering designs or processes, it may be eligible for the R&D Tax Credit. Your company can recoup significant costs associated with innovation.
Employee wages, raw materials and supplies, 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 what your potential state tax credit!