Research and Development Tax Incentives for the Product Engineering Industry

Engineering

Product Engineering

Research and Development Tax Incentives for the Product Engineering Industry

Today’s product engineer may not realize that their activities may entitle them to generous research and development (R&D) tax incentives, and even if they do, the traditional notions of R&D may cause product engineers to limit qualified research expenditures to activities associated with new product and invention developments. However, in many cases, product engineers spend a considerable amount of time and effort to develop product designs that achieve optimized process performance. Furthermore, many product engineers conduct extensive activities to design and develop the engineering processes themselves to achieve specific project requirements or to stay ahead of competitors in the marketplace. All these activities may require time and money both in the engineering department and on the production floor itself, which may be captured as qualified research expenditures leading to significant tax benefits. If you think you have to be a large public corporation developing products and inventions to be conducting qualified activities as defined by the Internal Revenue Code, think again.

If your company is in the product engineering industry and you’ve recently introduced new or improved products or process there is a strong chance that you could benefit from an R&D Tax Credit study. Let alliantgroup’s product engineering experts help you claim the credits that you deserve!

Examples of product engineering innovations eligible for R&D tax incentives include the following:

  • Conducting innovative product development using computer aided design tools
  • Developing second-generation or improved products
  • Tooling and equipment fixture design and development
  • Developing unique computer numerical control programs
  • Designing innovative programmable logic controllers
  • Designing innovative manufacturing equipment design
  • Prototyping and three-dimensional solid modeling
  • Designing innovative cellular manufacturing processes

Production process that may be eligible for R&D tax incentives include the following:

  • Designing and developing cost-effective and innovative operational processes
  • Integrating new materials to improve product performance and manufacturing processes
  • Designing, constructing, and testing product prototypes
  • Developing processes that would meet increasing regulatory requirements
  • Alternative material testing
  • Achieving compliance with changing emissions laws and regulations
  • Improving product quality
  • Improvements in Metalworking:
    • Casting
    • Forging
    • Welding
    • Amalgamating
    • Grinding

Specific product engineering activities that may qualify for R&D tax incentives include the following

  • Designing and developing¬†following:
    • Molds
    • Dies
    • Jigs
    • Fixtures
  • Performing quality assurance activities:
    • Testing and validating designs of molds, dies, jigs, and fixtures
    • Testing and validating machining procedures
    • Testing and validating computer controls
  • Improving molds, dies, jigs, and fixtures aimed to create a different use / product
  • Designing and developing new tooling
  • Designing, developing and testing of new tooling machinery
  • Optimizing¬†the tooling process
  • Exploring alternative materials testing
    • Advanced fabrics
    • Metals
  • Conducting production equipment development, implementation, and testing
    • Automation systems
    • CNC machining
    • Scanning
    • Rinsing systems
  • Conducting safety testing of product for durability and quality
  • Developing and testing new coating systems
  • Designing / implementing new health and safety procedures or equipment
  • Performing Electronic discharge machining
    • Wire
    • Probe
  • Stamping process improvement
  • Conducting urface finishing technique modifications

alliantgroup’s Engineering Industry Specialization Team

In order to better serve product engineers, alliantgroup, LP has developed an Industry Specialization Program that focuses on the qualification and quantification of R&D tax benefits for companies operating in the engineering industries. alliantgroup’s Engineering Industry Specialization Group employs several individuals who have educational backgrounds and practical experience within the disciplines of product engineering, industrial engineering, mechanical engineering, electrical engineering, and metallurgy. This group has qualified and quantified credits for firms ranging from small machine shops to large, multi-national, publicly traded companies.