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Medical Equipment Manufacturers R&D Tax Credits

The medical equipment industry covers everything from simple tools to sophisticated molecular imaging devices. Many businesses in this field do prototyping, process development, and testing to create innovative products and tools that improve patient care and results. However, not all are aware that each phase in the process is considered research and development for tax reasons. In other words, firms can reduce a considerable amount of related expenditures through tax incentives.

Government and numerous US states offer the Medical Equipment Manufacturers R&D tax credit to help firms recoup some of the revenue invested in research. The incentive can cover as much as 22% of overall QREs, though the percentage depends mainly on the location.

Qualifying Costs and Activities

Qualifying costs for the Medical Equipment Manufacturers research and development tax credit include employee wages and subcontractors. That means you can offset a portion of your budget spent on jobs like production and R&D engineering technicians, electrical engineers, industrial engineers, device and manufacturing engineers, C-suite, software developers, and QC and QA staff. In addition, you can cover supplies and material expenses.

However, for your company to state its claim, it must be involved in certain qualifying activities. For example:

  • Developing new or working on improving microfluidic systems;

  • Creating innovative machine learning software or image processing;

  • Establishing and evaluating production protocols and processes;

  • Designing equipment and prototypes for better cell extraction, separation, and purification;

  • Automating or incorporating robotics into the production process to boost productivity and efficiency;

  • Producing medical-grade information storage systems or point-of-care monitors.

Contact our experts if you are reluctant to go through the lengthy and often confusing process of computing and applying for this incentive. We can deliver a free estimate and assist with the claiming procedure for the R&D tax credit in the Medical Equipment Manufacturers industry.



What kind of companies can apply?

Medical equipment manufacturers 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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