R&D Tax Credit for Aerospace Industry
Many aerospace companies are missing out on valuable tax credits they deserve! One such credit is the R&D Tax Credit (R&D) offered by the IRS for the purpose of incentivizing companies that perform R&D activities. The credit is designed to reimburse companies who develop new products or inventions and offers a significant percentage back to the company for Qualified Research Activities and Qualified Research Expenses. You do not need to be a large company to qualify for the credit. ETS has helped companies of all sizes across the US to identify these expenditures and receive the tax benefits they have been missing.
Domestic Production Activities Deduction (DPAD) is another tax incentive currently available for production activities within the US.
Some of the activities that may qualify include:
- Developing new products
- Developing updated and revised products or methods
- Designing and developing new equipment or processes
- The implementation of new and innovative processes
- Process optimization
Companies in the Aerospace & Defense industry can potentially claim a Research Tax Credit for the subsequent categories:
- Internal Research & Development (IRAD) with contemporaneous documentation around the Work Breakdown Structure (WBS);
- Contract Research & Development (CRAD) with contemporaneous documentation around the Firm Fixed Price Contracts and Cost Plus Contracts; and
- B&P for RFPs.
The best way to determine if and how much of your business activities will qualify for the Research & Development tax credit or DPAD benefits, please contact us to speak with our R&D team. This team has over 25 years in the R&D industry both on the tax side and the engineering side and can provide an unparalleled level of knowledge and information to assist you.