Engineering R&D Credit
Engineering firms across all sectors are prime candidates for the R&D Tax Credit. Any company that engages in technical problem-solving to create or improve a design, product or process likely performs qualifying activities. The core requirement is facing and resolving “technical uncertainty.”
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Eligibility isn't limited to revolutionary inventions. The credit rewards the process of experimentation itself. This means that developing new product designs or testing different techniques qualifies—even if an experimental approach ultimately fails. If your work involves evaluating alternatives to improve performance, reliability, or function, you're on the right track.
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Qualified research is found in the daily problem-solving activities of many engineering disciplines.
Product & System Design
This involves creating new products or enhancing existing ones. The process of designing, building, and testing prototypes is a classic example of R&D
• Developing new product features or capabilities.
• Integrating new technologies or materials into a design.
• Using CAD or simulation software to model and test new concepts.
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Process Improvement
Focus on enhancing how things are made or done. Making processes faster, cheaper, more efficient, or more reliable.
• Developing new or improved manufacturing and fabrication techniques.
• Designing and implementing automation to improve production.
• Experimenting with new methods for quality control.
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Materials Science & Testing
Experimenting with different materials to achieve specific performance characteristics for a product or process.
• Developing and testing new formulas or chemical compositions.
• Evaluating alternative materials (polymers, alloys, composites) for improved durability or reduced cost.
• Conducting tests to validate material performance under specific environmental stresses.
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Ultimately, if your company invests time and resources to overcome technical hurdles to create or improve a product or process, you are likely performing work that qualifies for this valuable tax incentive.