The Research & Development Tax Credit

Research & Development is typically thought of as white lab coats, large technology companies developing advanced new products, or sending someone to the moon. The above is true if you are talking about the tax credit many years ago. However, recent regulation changes have made the incentive available to small to mid-sized companies.

The R&D tax credit is frequently overlooked because most companies don’t realize that their everyday activities qualify for the credit; there is a misperception of what R&D encompasses.

The R&D tax credit has evolved over the years into the largest tax credit in the tax code for small to mid-sized companies. Previously only fortune 500 companies could afford the resources to meet the documentation and qualification standards. The US Government realized the need to provide all employers in the United States with incentives for keeping manufacturing and design jobs here in the US as opposed to outsourcing abroad.

You can simply think about R&D as it relates to the tax code as a jobs program where the Government is providing employers with incentives for keeping jobs here in the United States related to new or improved products, processes, techniques, formulas, inventions, or software.

Top R&D Industries






Medical Equipment






Product Engineering

Engineering Services

Machine Shops

Software Development



Injection Molding

Oil & Gas



& More

Manufacturing &
Product Engineering

  • Development of new products
  • Prototype development
    and testing
  • Improvements in automation technologies
  • Concept development
  • Material Selection
  • Improving product quality
  • New or improved packaging
    and packaging systems
  • Process improvements (example: better quality, increase yield, reduce scrap)
  • Product design and development using computer aided design tools
  • Robotics
  • 3D Modeling
  • Developing computer numerical control programs
  • Design and development of molds, jigs, dies


  • Creating master plans
    and schematic designs
  • LEED Certification
  • Energy-efficient designs
  • CAD, 3D, or BIM modeling
  • Designing site plan to overcome site features
    •Municipal Codes
    •Geographic Conditions
    •Client requirements

Food Industry

  • New or improved recipes for flavor, nutritional value, and shelf life
  • New or improved production processes for reducing waste, reducing man hours, increasing yield, batching sequences

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