Product Engineering R&D Tax Credits

Product engineers devote significant time and effort to creating product designs that optimize process performance. In addition, they engage in lengthy design and development activities to meet particular project needs or maintain a competitive edge in the marketplace. Engineers also work with development and production teams throughout R&D to guarantee the quality of tangible products like fixtures, dies, jigs, and molds.

For this reason, companies that invest their resources in enhancing engineering designs or procedures qualify for the R&D tax credit in the Product Engineering industry. This incentive helps them recover a portion of funds through tax returns. It usually equals 22% of the total QREs. However, the credit amount changes depending on the state they conduct research in.

Qualifying Costs and Activities

Qualifying research expenses cover all your research-related costs, including third-party contractors, raw materials, and supplies. Furthermore, the credit allows you to get a refund on payrolls for certain positions, such as product and material engineers, yield analysis engineers, packaging design directors, design consultants, data scientists, CAD designers, and C-suite. Some examples of qualifying activities for the product Engineering R&D tax credit are:

• Utilizing CAD to simulate processes and products;

• Product quality control;

• Improving metalworking procedures (for instance, grinding, forging, and welding);

• Making and analyzing molds;

• Creating prototypes or novel products.

If you are interested in determining the exact amount you can get from the Product Engineering research and development tax credit, get in touch with our experts. We can offer you a free estimate and help you get the incentive without upfront costs.

FAQs

What kind of companies can apply?

Product engineering 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.