Advances in space exploration have made it possible for companies like SpaceX, Virgin Galactic, and Blue Origin to invest in the commercialization of space. Other companies are advancing the technology needed to support these endeavors. Many companies are not aware that the federal (and state) government offers significant tax incentives to businesses investing in research and development (R&D). If your aerospace company designs small satellites or rockets, develops tracking or communications systems, or invests in any number of projects aimed at advancing the field, it may be eligible to claim the R&D Tax Credit. The tax credit can result in significant credits and refunds, allowing companies to reinvest in continued 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!