26 February 2024

The manufacturing market covers a range of physical goods, which includes the creation of finished products from raw materials or semi-finished products, as well as the assembly, installation and repair of industrial machinery and equipment, and encompasses several other sectors.  

The activities involved in the manufacturing industry are crucial to the economy and have a significant impact on employment, technological innovation, and international trade. Manufactures in the United States account for 10.70% of the country’s total production, employing 8.41% of the workforce. Total manufacturing industry output was $2.5 billion in 2021, according to the National Association of Manufacturers (NAM). Additionally, there were an average of 12.5 million manufacturing workers in the US as of December 2021, with an average annual wage of $95,990.00 in 2021.  

R&D Tax Credit  

The Research and Development (R&D) Tax Credit is a federal incentive for businesses to invest in R&D activities in the US, providing companies with dollar-for-dollar saving for carrying out innovation-related activities.  

Credit is available for the most diverse sector, as long as it meets the criteria by which the incentive classifies “qualified research”, that is: research or experimental expense within the scope of IRC §174, research activities that constitute elements of a process of experimentation related to new or improved functions, among others.  

How does this Tax Benefit work?  

  • R&D Tax Credits reward companies for investing in technology and innovation.  
  • R&D Tax Credits can be recovered from up to 3 prior years and carry forward up to 20 years.  
  • Companies that develop new, or improve existing, products, processes, and software may be eligible for R&D Tax Credits.  
  • Our team works directly with clients to identify eligible R&D activities and expenses and works alongside your trusted tax professional to maximize your R&D Tax Credits. 

Qualifying Activities 

R&D is a fundamental piece of economic growth, and in the manufacturing industry, it represents a large part of the manufacturing process, including activities used to discover, develop, and implement new processes, products, and technologies, involving scientific and technological research, manly aimed at market advantage.  

Qualifying activities include patent development and many activities that improve or modify an existing product or process, as well as:  

  • Development of lightweight materials for vehicle components to improve fuel efficiency and performance; 
  • Research and testing of advanced safety technologies for autonomous vehicles; 
  • R&D for the development of new drug delivery systems and manufacturing processes to improve drug efficacy; 
  • Research on innovative packaging materials and technologies to ensure the stability and safety of products; 
  • Investigating the application AI for predictive modeling of chemical reactions and material properties; 
  • Innovation in sustainable and eco-friendly manufacturing practices for electronic products to reduce environmental impact; 
  • Development of novel food processing technologies to improve food and safety and extend shelf life.  

How can we help you? 

We specialize in helping companies finance innovation and secure funding for their Research and Development (R&D) activities through the comprehensive management of R&D Tax Credits. With more than 1,800 qualified employees, counting on specialists from different fields, committed to supporting companies of all sizes and in all sectors of activities. With our expertise, FI Group specialists can support your company in identifying qualified activities. 

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