Aerospace Engineering R&D Tax Credits

In the aerospace industry, nothing is as important as product safety and quality. Yet, to achieve that, the industry relies heavily on technological advances, which can be rather costly. For this reason, companies benefit greatly from incentives such as the Aerospace Engineering research and development tax credit to cover some of the expenses.

Aerospace Engineering R&D Tax Credit Explained

If your company designs innovative aircraft and their parts, tests prototypes, and works to improve various production processes, you may be able to claim the Aerospace Engineering R&D tax credit.

R&D tax credit in the Aerospace Engineering industry is offered both at the state and federal levels, and it’s meant to cover qualified research expenses (QREs).

However, R&D credit doesn’t cover the entirety of your QREs. Depending on the state, you can receive refunds of up to 22% of the total amount.

Qualifying Activities and Job Positions

In general, QREs encompass employee wages, cloud computer rental, supplies, raw materials, and costs of third-party contractors when they relate to research and development. With the R&D tax credit refund, you could cover job titles such as aerospace technicians and engineers, chemical engineers, CAD engineers, aircraft designers, and mechanical and software engineers.

If your company performs any of the following activities, you may be eligible for the R&D tax credit:

• Designing and producing unmanned aerial vehicles;

• Researching methods for lowering production costs;

• Designing aircraft simulators;

• Testing equipment;

• Improving navigation, lighting, communication, and more in commercial airplanes;

• Enhancing existing aircraft designs.

Contact our team of professionals to calculate your tax credit and get a free quote. Our experts can help you claim your Aerospace Engineering R&D tax credit without any upfront costs.

FAQs

What kind of companies can apply?

Companies that conduct qualifying research activities related to aerospace engineering.

What data do I need to calculate credit?

Claim period gross receipts.

What information do I need to provide?

General ledger expense detail, payroll records, project notes, project lists, emails, lab results, and other documents regarding QREs for the claiming period.

Is credit carryforward an option?

Yes, up to twenty years.