TYPICAL DAY TO DAY PROCESSES QUALIFY FOR R & D TAX CREDITS

BACKGROUND

Tri-Power Design LLC, a ISO 13485 and 9001 certified engineering and manufacturing company, are problem solvers. The company applies the latest technologies to take a customer’s idea from concept to product. They’ve taken ideas from the napkin sketch to the surgeon’s hands and from a foam model to the store shelf, designed and built custom automation machines and factory robots that package/ build assemblies from a multitude of parts, in seconds. With over 20 years of solving multidisciplinary engineering challenges in a think-tank environment, Tri-Power Design takes complex engineering challenges and turns them into solutions for medical, pharmaceutical, aerospace, consumer product and manufacturing industries. Whether it is surgical instruments, critical bench top test equipment, test fixtures, or hi-speed transfer and assembly systems, companies see a high ROI with Tri-Power.

Over the last decade, Tri-Power’s in-house manufacturing capability, located in its 8500 sq. ft. advanced manufacturing and prototyping facility, has grown to a level not usually seen in design firms.

CHALLENGE

Like every small company cash flow can be an issue. When looking for ways to improve the situation Tri-Power Design turned to New Jersey Manufacturing Extension Program, Inc. (NJMEP). The company had worked with NJMEP on numerous projects from ISO 9001:2008 (ISO 13485-Medical) certification to Energy Procurement. In response to a conversation with Tri-Power NJMEP introduced the company to R & D tax credits. Since 2012 NJMEP and its tax credit specialist have been working with Anthony La Rosa, Principal and Managing Partner at Tri-Power on improving cash flow through R & D Tax Credits. Most manufacturers are not aware that many of their typical day to day processes qualify as research expenditures.

SOLUTION

NJMEP assisted Tri-Power Design in preparing documentation to support the Federal R & D Tax credit filing by:

• Identifying Qualified Research and Development Activities
• Determine all qualifying expenses (wages, supply expenses, and contract expenses) attributable to the identified research efforts. This was done by collecting various types of contemporaneous documentation, including W2s, vendor invoices, etc. that will be used to calculate final figures relating to the IRS and State tax credits.
• Assemble Technical Supporting Documentation
• Delivery of the Final R&D Tax Credit Study

Provide 4 hours of support in the event that the tax credit claim and/or supporting documentation is subjected to questions, review or audit by either the IRS or the State authorities.

RESULTS

R & D Tax credits, in one year alone, allowed Tri-Power Design to:

• Reinvest money for long term growth
• Achieve a tax credit value of over $30,000
• Achieved a cash value saving of over $20,000

Mr. La Rosa commented, “The R & D tax credits were very helpful in reducing our tax burden which left more dollars in the company and indirectly allowed for spend in other areas. I continue to work with NJMEP on tax credits as well as other projects as needed. They are currently working on a Cost Segregation Study for us as I have been very pleased with their work.”