Manufacturing Tax Credits
Opportunities for Tax Savings and Deductions
Defining Tax Credits for the Manufacturing Industry
R&D tax credits are often the most powerful tax incentive available to business owners. Introduced in the 1980s by Congress primarily for technological research, the definition of what qualifies as research and development has changed and expanded significantly and now is available to many industries, including manufacturing.
When you think of activities which may qualify as research and development, some think of lab scientists inventing new products. In manufacturing, you are improving processes and creating new products regularly which are considered research and development and could qualify for valuable, government-endorsed tax incentives.
There are a number of elements in the manufacturing field which may be eligible as an R&D tax credit claim.
Potential R&D Tax Credits for Manufacturing
- Using computer-aided design (CAD) and computer-aided engineering (CAE) tools to model and simulate design and process alternatives.
- Developing new designs for production lines or improving existing production lines and equipment.
- Experimenting with plant layout design alternatives to improve material flow, increase equipment utilization, and achieve higher throughput rates.
- The design and development of new or improved tooling, fixtures, jigs, gauges, etc.
- Experimenting with the use of alternative materials to improve product quality and performance, or to simplify and improve the manufacturing process.
- Equipment setup and programming in support of the prototype build process for the testing and evaluation of design alternatives.
- Developing process improvements to reduce scrap rates and improve product quality, and process performance.
Meet Our Manufacturing Tax Credit Specialist
Tax Credit Director
Alex Bray, JD, LLM, MBA
Aldrich CPAs + Advisors LLP
A licensed attorney with a Master of Laws in Taxation and an MBA, Alex Bray is a taxation law expert. Prior to joining Aldrich as an affiliated independent contractor, Alex was a Tax Senior at a Big Four firm where he specialized in business tax advisory and quantitative services. During his time there, Alex enjoyed…
- Agribusiness tax credits
- Construction tax credits
- Engineering tax credits
- Manufacturing tax credits
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