Attention Manufacturers: You May Qualify for R & D Tax credits
In today’s competitive global marketplace, manufacturers must constantly innovate in response to evolving customer needs. The companies that do this will more than likely end up performing activities that qualify for Research and Development (R&D) tax credits.
OPPORTUNITIES FOR GROWTH
Sikich’s 2018 Manufacturing Report found that 28 percent of survey respondents view new product or service development as their top opportunity for growth. New products can effectively drive organic growth and allow a manufacturer to take advantage of R&D tax credits.
ADVANTAGES OF THE CREDIT AND HOW TO QUALIFY
For small and midsize manufacturers, R&D tax credits can often be as high as $50,000 to $100,000 annually, resulting in a significant influx of capital into a manufacturing operation that can fuel ongoing innovation and growth. Oftentimes, manufacturers don’t realize that they perform activities that qualify for the credit. There’s a common misconception that a company must invent an entirely new product–never before seen in the industry–to qualify for the credits. However, if a manufacturer introduces a product that’s new to their product line or even materially enhances their existing product, it could qualify for the credits.
By taking full advantage of the credits, manufacturers will have more capital available to deploy, which could benefit their businesses. In addition, manufacturers can retroactively receive the credit for years that fall within the statute of limitation. So, even if a manufacturer hasn’t applied for the credit, they have an opportunity to benefit for activities they completed prior to the current year.
Find out more at Sikich’s information website. Sikich offers its services to TMA members from its Naperville, Illinois office – (877) 279-1900.