White Papers

The federal research and development (R&D) credit gives manufacturers conducting qualified research the ability to generate a net research tax credit of 13 percent (9.1 percent under an alternative simplified method) of incremental qualified R&D spending* in order to lower their regular tax bill. This credit can result in significant tax savings for manufacturing companies; however studies have shown that it is surprisingly under-claimed. Manufacturing companies that develop new products, make improvements to existing products and develop or improve manufacturing processes are likely to qualify for the R&D credit. Middle market companies are among those least likely to take advantage of this beneficial credit.