Free R&D Tax Credit Analysis
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Plastic Industry Qualifying Activities
If you’re affiliated with a plastics and injection molding company, your industry is an ideal candidate for R&D tax credits, but you might be unaware of it. These 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
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.
If you’re in the plastics industry, this 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.
What Activities Qualify for Tax Credit?
The following are qualified research activities for the plastics industry:
- Design and development of new or improved molds;
- Developing new or improved injection systems;
- Designing, constructing, and testing of prototype molds;
- Designing new compounds or formulations;
- Developing new applications for existing compounds;
- Development of new testing methods and protocols;
- Implementing automation processes or robotics;
- Innovative product development using computer-aided design tools;
- Designing innovative manufacturing equipment;
- Integrating new materials to improve product performance and manufacturing processes;
- Designing and evaluating process alternatives;
- Streamlining manufacturing processes through automation;
- Increasing manufacturing capabilities and production capacities
Common Misconceptions
Another misconception is you must be a C-Corp to qualify, and this isn’t 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.
Get Qualified Today
Last year, the IRS made its reporting and record-keeping requirements for R&D tax credits much, much stricter and complex. As a result, it’s to your benefit to only rely on a specialized company with both engineering and accounting capabilities that can undertake a full-fledged technical study.
As a licensed engineering firm backed by accountants that focuses on federal, state, and local tax benefits, Engineered Tax Services is an expert at R&D tax credit studies. Over the past 20 years, we’ve saved clients many, many millions of dollars.
Getting an R&D Tax Credit Analysis to see if you qualify is the first step!
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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 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 …
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IRS Update *** The IRS is extending for another year (through January 10, 2024) the transition period during which taxpayers are provided 45 days to perfect a research credit claim for refund prior to IRS’s final determination on the claim. A recent comment by an IRS official indicating that the agency may extend the … Read more
New York State Offers a Life Sciences Research and Development Tax Credit
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