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Electronics R&D Tax Credits

Over the last few years, the electronics manufacturing industry has drastically changed. Unfortunately, this has meant that many businesses have struggled to keep up. In many cases, only those companies that continue investing in R&D can hope to have a lasting influence in the years to come. That is because innovations in the electronics sector affect many other industries, such as energy production, AI, IoT, automobile comfort and safety, healthcare, etc.

However, investing in producing sensors, optical instruments, micro- and nanoelectronics, PCBs, and similar advanced tech is fairly expensive. Because of this, the US government and certain states provide tax incentives allowing electronics manufacturing businesses to recoup a portion of their expenses. One such incentive is the R&D tax credit in the Electronics industry which can cover a maximum of 22% of QREs. That said, the final credit amount changes depending on the location where companies or their subcontractors conduct research.

Qualifying Costs and Activities

Use this incentive to cover salaries for electrical engineering technicians, electrical or electronics engineers, manufacturing process engineers, control engineers, software developers, C-suite, production managers, and CAD personnel. Moreover, qualifying expenses for the Electronics research and development tax credit include supplies, cloud computing services, subcontractors, and raw materials.

To claim this tax credit, your company must invest in qualifying activities like:

  • Designing PCBs with additional functions or capabilities;

  • Creating sensors with greater sensitivity;

  • Implementing new assembly or production techniques to cut costs and increase efficiency;

  • Producing components that enhance connection, speed, or integration;

  • Making prototypes or first products;

  • Analyzing nanoelectronic components (such as graphene and carbon nanotubes) for usage in innovative applications.

You can partner with us to claim the Electronics R&D tax credit and pay only when the procedure is done. Moreover, get in touch with our team to compute the potential sum free of charge.



What kind of companies can apply?

Electronics manufacturing companies that conduct qualifying research activities.

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, purchase orders, and other documents regarding QREs for the claiming period.

Is credit carryforward an option?

Yes, up to twenty years.

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