R&D Tax Credits  /  Manufacturing
R&D Tax Credits · Industries

R&D tax credits for
manufacturers.

New products, better processes, custom tooling, automation, improving how you make things is technical work, and much of it qualifies. Manufacturing is one of the most consistent R&D credit industries there is.

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The Opportunity

Improving how you make it counts.

Manufacturers innovate constantly, developing new products, improving yield and quality, designing tooling, automating lines, testing materials. Each involves technical uncertainty and experimentation, exactly what the credit rewards. And the credit covers both the products you develop and the processes you use to make them.

What Qualifies

The work that counts.

Product development

  • New or improved product design and development
  • Prototyping and testing
  • Material selection and substitution
  • First-article and custom engineering
  • Design for manufacturability

Process & production

  • Process design and improvement, yield, quality, efficiency
  • Tooling, fixture, jig, and mold development
  • Automation and robotics integration
  • Additive manufacturing
  • Production scale-up and testing
Example Projects

What it looks like in practice.

New product prototype

Developing and iterating a product design to meet performance and cost targets.

Process improvement

Re-engineering a production process to raise yield or quality under real uncertainty.

Tooling & automation

Designing custom tooling or automating a line where the approach wasn’t obvious.

Worth Knowing

Product and process both count.

Many manufacturers claim product development but miss the process side, tooling, automation, yield and quality improvement, which is often the larger pool. Routine production and standard quality control don’t qualify, but the technical development behind them does. And for custom or contract work, whether it qualifies can turn on who bears the risk and owns the result.

We capture both product and process, and sort out the contract terms on custom work, so nothing qualifying is left behind.
The Test, Applied

How the four-part test lands here.

01

Permitted purpose

A new or improved product or production process.

02

Technological in nature

Grounded in engineering and the physical sciences.

03

Elimination of uncertainty

It was uncertain whether the design or process would achieve the target.

04

Process of experimentation

Resolved through prototyping, testing, and production trials.

Common Questions

Questions we hear.

Does process improvement really qualify?

Yes, developing a new or improved process, better yield, quality, or efficiency, is squarely within the credit, and it’s often overlooked.

What about custom or first-article work?

It can qualify, though for customer-funded work the contract terms matter. We review who bears the risk and owns the result.

Do failed attempts count?

Yes, the trials that didn’t work are part of the process of experimentation the credit rewards.

See what your work qualifies for.

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This page is general information, not tax or legal advice. Whether specific activities and expenses qualify depends on the taxpayer’s facts and applicable law, and is determined through the appropriate R&D study. Novaric does not guarantee eligibility, credit amounts, or any IRS outcome.