Free R&D Tax Credit Analysis

Let's get started by talking to one of our R&D Tax Credit experts to see how much we can gain you by getting a FREE R&D Tax Credit analysis today!

Home » Services » R&D Tax Credits » Industries » R&D Tax Credits for the Automobile Industry

Automobile Industry Qualifying Activities

There’s no question that the automobile industry spends billions of dollars a year to create new products and perfect existing ones through research and development (R&D). But if you’re a member of the auto industry (or a CPA firm with automobile clients), did you know that both federal and state R&D tax credits could reward you for fostering technological innovation in the U.S.

automobile industry

This tax credit is designed to keep the U.S. a world leader in innovation. They were created by Congress in 1981 to reimburse companies that pursue technological advance via research and development projects. Offered by the federal government and 35 states, the credit rewards these companies with a substantial tax credit they can use to offset future tax liability, expand factory capacity, acquire new employees, or finance future R&D ventures.

How R&D Could Drive Your Future

In recent years, the auto industry has been whipsawed by an industry downturn and the demand to create next-generation vehicles—those with up-to-the-minute digital features and powered by alternative energy sources. As a result, today’s cars are more high-tech than ever. On top of this, the COVID pandemic has shut down plants and closed offices, and automakers are challenged by the need to cut costs while boosting efficiency.

This situation demands R&D activities to meet these special circumstances. As a result, your R&D dollars (and how you use them) are more important than ever, and tax credits can be valuable way to free up your working capital.

Examples of Qualified Activities

Since the days of Henry Ford and the Model T, the automobile industry has been based on technological research and improvement. Today’s vehicles are showcases of computer-based, high-tech components, so any research based on that premise would definitely qualify.

Here are some examples:

  • Creating prototypes of new models, automotive parts, or accessories through designing, building, and testing
  • Creating new designs of manufacturing equipment and tooling
  • Developing self-driving cars
  • Improving manufacturing equipment and tooling
  • Implementing computer technology to perfect or enhance existing models or parts, possibly via three-dimensional modeling
  • Making manufacturing operations more efficient
  • Testing for quality assurance
  • Testing alternative materials
  • Upgrading current parts to improve product performance
  • Testing cars and parts to comply with regulations and safety guidelines
  • Enhancing the safety of the environment or employees

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

This comprehensive e-book is designed to help you recognize which of your activities qualify for R&D tax credits! 

Webinars: R&D Tax Credits

Testimonials: Our valued clients

Andrew Krowne, CPA
Andrew Krowne, CPAKrowne Certified Public Accountants
Read More
“We work with Kimberly Lochridge and her expertise and work-product is top notch. They are our #1 resource for Cost Segregation Studies for all of our clients.”
Lewis B. Kevelson, CPA
Lewis B. Kevelson, CPARachlin LLP
Read More
“I wanted to thank you for the cost segregation and energy tax work you have done for several of the firm’s clients. The results have been very favorable and have resulted in significant tax benefits. You have a very talented team, and I look forward to working with you more in the future.”
Lou J. Fuoco, CPA
Lou J. Fuoco, CPAFuoco Group, LLP
Read More
I have worked with Engineered Tax Services for approximately two years and feel that they are the best in the business in terms of providing cost segregation and energy tax services.

Case Studies: R&D Tax Credit


R&D Tax Credit Case Study for Specialty Manufacturer in Oregon

1 Year Tax Savings: $18,078 (Federal Only) Study Highlights   Wages $525,358 Supplies $26,953 Rental or lease of computers 27.5-Year Contract Research $11,760 Total Qualified …


R&D Tax Credit Case Study For Specialty Manufacturer in New York

1 Year Tax Savings: $18,078 (Federal Only) Study Highlights Wages $358,407 Supplies $26,953 Rental or lease of computers 27.5-Year Contract Research $14,227 Total Qualified Research …

R&D Tax Credit

R&D Tax Credit Case Study for Software Developer in Texas

1 Year Tax Savings: $72,430 (Federal Only) Study Highlights Wages $1,342,919 Supplies $0 Rental or lease of computers $0 Contract Research $0 Total Qualified Research …

Case Studies: R&D Tax Credit

manufacturing businesses

The Power of R&D Tax Credits for Manufacturing Businesses

It’s no secret that manufacturing companies face a host of tax concerns, but there is a solution. Many business owners are unaware that they are …

Read Full Article

The Case of Cajun Industries: 3 Questions to Consider Before Claiming R&D Tax Credits

A recent lawsuit filed in the U.S. District Court for the Middle District of Louisiana highlights three important questions that every taxpayer should consider before …

Read Full Article

What R&D Changes to Amortization vs. Expensing Mean for You

In 2017 the Tax Cuts and Jobs Act (TCJA) included significant tax breaks for taxpayers but often when a bill like this is passed, the …

Read Full Article