Shipbuilding & Marine Manufacturing R&D Tax Credits
The shipbuilding and marine manufacturing industry is no stranger to innovation. Consequently, investing in operations like improving ship designs and builds, experimenting with new processes and tools, and upgrading existing shipbuilding technology usually qualify for government and state tax incentives.
One such incentive is the Shipbuilding & Marine Manufacturing R&D tax credit, which can cover as much as 22% of overall QREs. However, it is crucial to accurately identify and document all qualifying activities and costs in order for a credit to be granted. Furthermore, the amount isn’t set — it changes based on the location where you conduct research.
Qualifying Costs and Activities
Basically, you can apply for the Shipbuilding & Marine Manufacturing research and development tax credit if you invest in these and similar activities:
Examining new and more efficient hull construction materials;
Using AI and robots to improve worker safety and productivity;
Creating prototype components and 3D models, as well as first-article vessels;
Producing new software for ship control or propulsion systems;
Developing novel manufacturing techniques (like assembly, welding, cutting, and lamination).
As far as QREs are concerned, you can use this incentive to get a tax return on all research-related expenses. That includes supplies, subcontractors, raw materials, and employee salaries for positions like solderers or welders, software developers, C-suite, QC personnel, navigation specialists, naval architects, and mechanical, marine, and electrical engineers.
Contact us if you have any questions or want an estimate free of charge. We also offer assistance during the application procedure for the R&D tax credit in the Shipbuilding & Marine Manufacturing industry without upfront payments.
What kind of companies can apply?
Shipbuilding and marine 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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