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Industrial Automation R&D Tax Credits

As Industry 4.0 continues to influence many businesses, there has been a significant need for automation technologies in both commercial and industrial settings. Manufacturing processes are now more streamlined, efficient, and secure thanks to software developments and the combination of human and robotic work. In fact, Precedence Research found that the size of the worldwide industrial automation market was USD 196.6 billion in 2021 and would likely reach USD 412.8 billion by 2030, growing at a CAGR of 8.59% between 2022 and 2030.

However, investing in R&D in this field is quite expensive. That’s why companies conducting qualifying research can claim the Industrial Automation research and development tax credit to offset a portion of the costs. The amount usually changes according to the company location, but it can cover as much as 22% of your qualifying research expenses.

Qualifying Costs and Activities

Your company can utilize R&D tax credit in the Industrial Automation industry to offset research-related costs such as raw materials, cloud computing services, supplies, and subcontractors. Moreover, QREs often include wages for employees like software and automation engineers, systems architects, mechanical and electrical engineers, C-suite executives, security analysts, project managers, CAD modelers, and automation engineers.

However, your company must invest in certain activities to claim this tax incentive. Those can include:

  • Creating customized enterprise resource planning (ERP) or product lifecycle management (PLM) systems;

  • Putting new enterprise-level control mechanisms in place;

  • Automating processes to increase effectiveness or safety;

  • Introducing more automation to upgrade manufacturing processes;

  • Creating and evaluating prototypes and first publications;

  • Enhancing production methods to boost output.

Contact us if you need help applying for the Industrial Automation R&D tax credit. We offer our assistance during the process with no upfront costs. Moreover, we will calculate your potential gain free of charge.



What kind of companies can apply?

Industrial automation 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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