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Flying High With R&D Tax Credits in the Aerospace Industry

The aerospace industry is a dynamic and technologically advanced sector that is constantly pushing the boundaries of what is possible. This industry is characterized by its high level of research and development (R&D) activities, making it an ideal candidate for R&D tax credits. These tax credits are powerful tools that can significantly reduce a company's tax liability, increase its business valuation and free up capital for further business development.


The Power of R&D Tax Credits in the Aerospace Industry

The aerospace industry is a perfect fit for R&D tax credits due to the highly technical and complex nature of its projects. These projects often involve long-term initiatives that require complex, interconnected systems to work seamlessly together. To ensure that new aerospace systems function properly, extensive iterative research and testing are necessary to meet specific project criteria, rules and laws.

Qualifying Activities for the Aerospace Industry

The aerospace industry is involved in a wide range of activities that could qualify for R&D tax credits. These include:

  • Developing new or improved manufacturing processes to increase output, improve performance or reduce waste
  • Creating tooling, dies and fixtures for new or improved production processes
  • Developing methods to reduce production costs and product weight
  • Creating new or improved aircraft, aerospace and weaponry components for customers
  • Designing new aircraft components with exacting specifications or narrow tolerances
  • Sequencing and re-sequencing manufacturing operations
  • Creating prototypes and first articles to validate design and performance, including conducting quality control to test new iterations
  • Developing new machines, fixtures, jigs and tools to manufacture and assemble aircraft
  • Creating new composite materials
  • Performing secondary operations, such as surface treatment of metals
  • Developing new or improved metal forming, welding and machining techniques
  • Improving communication, navigation, lighting and in-flight entertainment systems in commercial planes
  • Designing or creating kits to integrate new monuments, galleys, seats or in-flight entertainment systems
  • Developing new heat-treatment profiles and procedures
  • Creating new automated processes
  • Developing software programs to automate production equipment
  • Improving aircraft simulators and cockpit software
  • Making modifications to comply with regulations, such as testing new equipment
  • Conducting metallurgical, tensile and gate freeze studies for evaluating products and components
  • Improving aircraft designs to reduce drag (for example, engineering narrower wings, smoothing the surface or developing improved materials)
  • Developing new unmanned aerial vehicles (UAVs)

Qualifying Job Titles

The aerospace industry employs a wide range of professionals whose work could qualify for R&D tax credits. These include:

  • Aerospace engineers
  • Chemical engineers
  • Computer-aided design (CAD) engineers
  • Materials engineers
  • Mechanical engineers
  • Software engineers
  • Aerospace technicians
  • Aircraft designers
  • QA/QC personnel

Getting an R&D Tax Credit Analysis to see if you qualify is the first step!

eBook: The Architect's Guide to R&D Tax Credits

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