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Unlocking Potential: How Manufacturing Companies Can Qualify for the R&D Tax Credit

In today's highly competitive business environment, innovation is the driving force behind the success of manufacturing companies. Governments worldwide recognize the role played by manufacturers in promoting technological advancements and, as a result, offer Research and Development (R&D) tax credits to encourage investment in technical innovation.

There are many ways manufacturing companies can qualify for R&D tax credits, and eligible activities span a broad spectrum, ranging from product development and process improvement to the creation of new materials and technologies.  Examples of qualified research activities include:

  • New Product Development – Investing in the development of new products, whether it’s consumer goods, industrial equipment, or specialized machinery.
  • Product Improvement – Engaging in the improvement of existing products, whether it’s adding new features or enhancements, or product redesign aimed at cost reduction.
  • Material Development – Creating new materials or enhancing existing materials, such as novel alloys, polymers, or composites.
  • Process Development and Improvement – Streamlining manufacturing processes to enhance efficiency, reduce waste, or improve quality. 
  • Robotics and Automation – Developing and implementing automated systems, including customizing off-the-shelf solutions or developing new systems.
  • Tooling and Equipment Development – Developing tools and equipment that improve manufacturing processes, increase precision, or reduce costs.  This includes the design and creation of specialized machinery or software systems, tools and molds, jigs, fixtures, and test stands.

Manufacturing companies play a pivotal role in driving economic growth through innovation. The R&D tax credit serves as a powerful incentive for these companies to continue investing in the creation of new technologies. As the manufacturing landscape evolves, leveraging the R&D tax credit becomes increasingly crucial for companies looking to invest in their future success.

Contact Earnd so we can help your company qualify, quantify, and claim the credit you deserve for your company’s investment in R&D.