Freed Maxick Service Delivery Update

We have implemented a phased approach for returning to our offices that allows us to modify our approach to service delivery as situations change without any service disruptions. In the meantime and in the interest of public health and the safety of our community, our teams will continue working remotely whenever possible to provide the same high-quality service you have come to expect. Utilizing state-of-the-art technology, we are committed to meeting all of your assurance, tax, and advisory needs to help you navigate a business environment filled with challenges and opportunities. To discuss a specific need that can’t be handled remotely, please contact your Freed Maxick representative directly.

Driving Innovation and Investments With R&D Tax Credits

By Joe Burwick, CPA on February, 11 2020
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Joe Burwick, CPA

R&D Manufacturing

As a business owner, you recognize the importance of continuous investment in your manufacturing business. But, as the manufacturing landscape becomes increasingly competitive and globally inclusive, you may ask yourself: “Where can I find the extra capital I need to drive my business forward?” One relatively straightforward way to do this is to take advantage of the Research and Development (R&D) tax credit, a dollar-for-dollar tax credit that may be applied against taxes for the generating business.

Less than one-third of eligible companies realize they qualify for the R&D tax credit. For federal purposes, the R&D credit allows qualifying taxpayers to receive up to 14% of qualified research expenditures (QREs), such as in-house research expenses and contract research expenses. QREs can come from a wide variety of expenses but generally will include wages paid to qualifying employees and associated expenses used to develop a new product or process. Examples of manufacturing activities that may qualify include:

  • Designing manufacturing equipment
  • Optimizing manufacturing processes
  • Designing and developing tooling and equipment
  • Designing and testing prototypes

In addition to federal R&D credits, more than 30 states offer some version of an R&D credit. Planning accordingly can allow your business to reap twice the rewards on an investment you’re already making. Most states offer credits ranging from 2% to 6%, potentially allowing your business to return 6% to 14% of your original investment.

Freed Maxick Can Help

New call-to-actionNeed help creating an R&D tax credit survey to help determine which of your manufacturing activities qualify? Please contact Freed Maxick at 716.847.2651 or fill out our contact form.

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