The semiconductor industry is integral to many other business sectors, including automotive, healthcare, defense, computing, and communications, among others. If your semiconductor company improves the processing power of chips, lowers the costs of products by implementing novel production efficiencies, or develops new testing procedures, it may be eligible to claim the Research and Development (R&D) Tax Credit. Federal and state R&D tax credits can save your company money that can be reinvested in furthering research and 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:
- Developing new hardware and software solutions
- Experimenting with micro- and nano-scale architectures
- Designing a test apparatus to validate semiconductor characteristics
- Creating prototypes and ensuring regulatory compliance
- Creating novel products for consumer, military, or commercial use
- Evaluating novel materials to improve performance characteristics
Do you have these job titles on your payroll, or do you hire third-party contractors to do these jobs?
- Computer Specialists
- Data Scientists
- Electrical Engineers
- Materials Scientists
- Process Engineers
- Quality Assurance / Control (QA/QC) Personnel
- Supply Chain Engineering Managers