by Michael Siegel, alliantgroup Managing Director
Now more than ever, businesses rely on automation to run their industrial facilities and supply chains. It is a trend that is decades in the making and will only intensify as the Internet of Things and automated technologies play a bigger role in our factories.
However, the benefits of these technologies extend to more than just higher production rates. The steps taken to implement these advancements can have an immediate financial impact for industrial distributors, manufacturers and value-added resellers—and it is all thanks to one lucrative tax incentive.
The R&D Tax Credit: The Rewards for Enhancing Automated Efficiency
The Research and Development (R&D) Tax Credit is one of the most valuable provisions of the tax code, and due to changing laws and regulations, the credit has evolved and expanded in the decades since its inception. Today the R&D Tax Credit is as much about rewarding the technical problem-solving that occurs on the factory floor as it is about rewarding laboratory research.
During my years at alliantgroup, I have worked hand-in-hand with our CEO Dhaval Jadav in educating U.S. businesses on this credit, and I can tell you from personal experience that companies working in the area of automation and industrial processes have seen some of the absolute highest benefits. Just to name one example, an industrial distributor received over $641,000 in federal R&D tax credits for four years’ worth of projects, proving the potential game-changing value here for qualifying businesses.
What Qualifies
In our experience, here are a few common activities that have qualified industrial distributors, high technology manufacturers and value added-resellers in the past:
- Providing clients with products and services that increase production rates, reduce waste and improve quality
- Installing, optimizing and maintaining equipment through performance engineering and systems integration
- Programming industrial control systems and various instrumentation, such as SCADA, PLC, embedded sensors and pneumatic devices
- Modernizing legacy applications and assimilating older devices with new technologies
If your business has performed any of the above activities, or works in the area of automation, I would strongly encourage you to stop by our booth throughout the conference. It could bring immense value back to your bottom line.
Michael Siegel is a managing director and Manufacturing Team lead based in alliantgroup’s corporate headquarters, serving CPAs and businesses throughout the country. Since joining alliantgroup, Michael has assisted hundreds of small and middle-market businesses in taking advantage of the R&D tax credit and other corporate incentives. He is a certified public accountant with more than 20 years of experience in accounting, tax and business consulting. Michael received his B.B.A. in accounting from the University of Wisconsin – Madison
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