Molded for the Future: R&D Tax Credits for the Plastics Industry

Published in Plastics News

Plastics and injection molding companies are eligible for Research & Development (R&D) Tax Credits, but often they are unaware of it. R&D tax credits are federal and state tax incentives meant to stimulate innovation, technical design, and product development and enhancement and keep the U.S. on the forefront of innovation. These tax credits reimburse companies that develop new products, processes, or inventions and offer a significant percentage back to the company for qualified research activities and qualified research expenses.

r&d tax credits for plastic industry
Plastic Injection Molding

R&D Tax Credits for Plastics Industry a Hidden but Immediate Source of Cash

The R&D tax credit allows companies to realize tax savings, increase cash flow, and stay competitive in the marketplace. In fact, many qualifying activities are considered day-to-day operations in the plastics and injection molding industry. 

The R&D tax credit can provide a hidden but immediate source of cash for you from prior years, and it can significantly reduce your current and future year’s federal and state tax liabilities.

The Four-Part Test

If you are in the plastics industry, how do you know if you qualify for R&D tax credits? Just take this simple four-part test established by the IRS – Click Here

What Activities Qualify for an R&D Tax Credit for Plastic Industry?

The plastics industry has unique activities specific to the plastic and injection molding industry, learn more about these activities here.

Common Misconceptions

Another misconception is you must be a C-Corp to qualify, and this is not the case.  Any type of entity can qualify, whether a C-Corp, S-Corp, or LLC.  If your business is a flow-through, then the R&D tax credit flows through to the shareholders/members.

Additionally, many believe you must be paying tax to claim the credit. You can claim the credit even if your business is in a loss, since you can carry forward the credit for up to 20 years; and via the CARES Act, you can now carry back the credit for five years.  Of course, it may not make sense to claim a credit you can’t use, but if your business is going to be in a taxpaying situation in the near future, it may make sense to claim the credit, and then use it to offset future tax.

Recent Posts

grant support

Finding the Secret Door to Grants Support

Searching for grant support can feel like wandering through a maze, right? You spend hours online, only to find dead ends, hidden costs and unresponsive providers. It’s enough to make anyone want to throw in the towel. But what if we told you there’s a better way? The experts at ETS Grant Services recently did

Read More »
retroactive cost segregation

Unlock Profits With Retroactive Cost Segregation

Real estate, with its potential for appreciation and passive income, has long been a cornerstone of wealth building. However, maximizing returns goes beyond finding the right property; it requires savvy tax planning to keep more of your hard-earned income. This is where retroactive cost segregation emerges as a powerful, yet often overlooked, strategy for property

Read More »
aerospace field

R&D Tax Credits for the Aerospace Field

The global aerospace industry invests billions of dollars in research and development each year, driving groundbreaking advancements in technology and innovation. This massive investment underscores the industry’s commitment to pushing the boundaries of what is possible in aviation and space exploration. One way aerospace companies can offset these substantial R&D costs is through R&D tax credits.

Read More »

Contact Us