Despite spanning three NAICS codes and represented by over 600,000 taxpayers, less than 4% of U.S. businesses identify as a "manufacturer". However, over the life of the R&D Tax Credit, manufacturers have been the largest credit claimant pool. The most recent published data from the IRS shows that approximately 60% of the total credits claimed by corporations was claimed by the manufacturing sector.

This industry area includes everything from large-scale fabrication and ship building to small-scale precision manufacturing and job shops. Thus, regardless of the size of the business, its activities are likely part of day to day activities and worth exploring for potential tax credit savings.  Common qualifying R&D activities include, but are not limited to:

  • Prototyping;
  • CNC Programming;
  • CAD Modeling/Development;
  • Injection/Rotational Molding; and
  • Custom Fabrication.

Industry Case Studies

Contract Manufacturer


Revenue: $80mm

Credit: $900k

Qualifying Activities: Metalforming, CAD design, Programming Logic Controls and CNC

Qualifying Personnel: Floor Managers, Project Managers, Machinists

Aerospace Manufacturer


Revenue: $30mm

Credit: $250k

Qualifying Activities: CNC Machining, Prototyping, First Run Articles, Quality Assurance 

Qualifying Personnel: Project Managers, Senior Machinists, QA Lead

Job Shop


Revenue: $11mm

Credit: $130k

Qualifying Activities: Prototyping, First Run Articles, CAD Design

Qualifying Personnel: Project Managers, Production Superintendent, Machinists