Manufacturing & Machinery Overview

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

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Revenue: $80mm


Credit: $900k


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


Qualifying Personnel: Floor Managers, Project Managers, Machinists

Aerospace Manufacturer

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Revenue: $30mm


Credit: $250k


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


Qualifying Personnel: Project Managers, Senior Machinists, QA Lead

Job Shop

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Revenue: $11mm


Credit: $130k


Qualifying Activities: Prototyping, First Run Articles, CAD Design


Qualifying Personnel: Project Managers, Production Superintendent, Machinists