Packaging R&D Tax Credits

Packaging manufacturers work closely with medical devices and pharmaceutical industries. That means they must adhere to safety and legal requirements, meet FDA-approved standards, and comply with supply chain and retailer specifications.

As a result, packaging companies rely on innovation in every stage of the manufacturing process — from design to development and production. Such R&D operations can sometimes be rewarded with state or federal tax credits, like the Packaging research and development tax credit. The incentive can cover up to 22% of the claim period QREs. However, the actual sum changes according to individual states and their regulations.

Qualifying Costs and Activities

Many areas currently stand out as fertile ground for innovation in the packaging field. Therefore, companies that do any of the ensuing activities are excellent candidates for the Packaging R&D tax credit:

• Upgrading or refining BFS (blow-fill-seal) technology;

• Creating new temperature-sensitive labels to guarantee adequate transportation and storage;

• Establishing and testing alternative manufacturing techniques;

• Developing new smart adhesion packaging options;

• Introducing innovative sustainable or environmentally friendly packaging;

• Considering new packaging options to satisfy shipping standards;

• Increasing the efficiency of a production line by incorporating robotic capabilities or automation.

Eligible costs for this lucrative incentive include supplies, materials, and wages for your employees and subcontractors. In other words, you can offset salaries for jobs like design and packaging development engineers, reliability and process engineers, project and manufacturing managers, C-suite, and QC and QA staff.

If you want to maximize your R&D investment, contact our specialists today. While we handle your R&D tax credit in the Packaging industry application, our expert tax advisers will provide a gratis estimate and support you throughout the procedure, enabling you to focus on other important tasks.

FAQs

What kind of companies can apply?

Packaging 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.