Chemical Industry R&D Credit

The R&D Tax Credit is a powerful incentive designed specifically for the work chemical companies do every day. It rewards the technical problem-solving inherent in developing new formulations and processes, turning your firm's innovation into a significant tax refund.

Eligibility doesn’t require discovering a new element. Instead, the credit rewards your process of systematic trial-and-error to arrive at a final product. If your team experimented with different formulations, catalysts, or reaction parameters to resolve technical uncertainty and meet specific performance, safety, or regulatory goals, you were likely performing qualifying R&D.

 

Qualifying activities are present throughout the entire product and process lifecycle:

 

Formulation & Product Development
This foundational stage involves creating and testing the core composition of your products.

• Experimenting with new chemical formulations or compounds to meet specific customer or performance requirements (e..g., a new coating, adhesive, or polymer).

• Developing and testing new formulations to improve product characteristics, such as enhanced durability, lower VOCs, or improved stability.

• Evaluating and testing new, sustainable, or bio-based feedstocks as replacements for traditional petroleum-based ingredients.

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Process Development & Scale-Up
This phase focuses on engineering the reaction to be safe, efficient, and commercially viable.

• Designing and testing new reaction pathways or synthesis methods to improve yield, reduce byproducts, or lower energy consumption.

• Conducting pilot plant trials to resolve technical uncertainties related to scale-up, such as heat transfer, mixing challenges, or fluid dynamics.

• Experimenting with different catalysts, solvents, or reaction conditions (temperature, pressure) to optimize the manufacturing process.

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Analytical & Regulatory R&D
The technical work required to meet and validate strict quality, safety, and environmental standards.

• Developing new, in-house analytical testing methods to detect impurities or validate product specifications at a more precise level.

• Prototyping and testing new purification, filtration, or separation techniques to achieve higher purity levels or isolate target compounds.

• Developing and testing new processes to treat, reduce, or "upcycle" waste streams to comply with new environmental regulations.

 

From the lab bench to the full-scale reactor, the chemical development process is filled with qualifying activities that can translate into valuable tax savings.