This is where the R&D tax credit really shines. Electronics manufacturing is rife with technical and financial risk, which means that the work being done qualifies for the credit
The 2020 electronics manufacturing market was worth an estimated $133 Billion, with the potential to grow to over $250 Billion by 2026. The importance of electronics manufacturing is only increasing, and the projected market value showcases that. With nearly every industry and household relying heavier on electronic products, the necessity for electronics manufacturing companies only increases.
With climbing risk and compounding operating costs, electronics manufacturing companies, especially small to medium-sized businesses, are often exploring new ways to increase cash flow. For these companies, the R&D tax credit can provide substantial assistance. QREs (qualified research expenses) encompass all the development expenses your company might incur during your development process, so if your company is already spending the money, you are entitled to benefit from this program. Development of products and processes entail technical and financial risk, which the R&D tax credit can help relieve.
This contract manufacturing company works with a diverse customer base that requires varied levels of research and development across all projects. This particular case study qualified automation software and a custom-engineered fixture, which required significant R&D and testing. The automation software is used to create a communication link between component storage and a delivery system. Each change in design required testing to ensure compatibility and functionality. The new fixture is used to hold a unique manufacturing component that must have precision cuts and bends. Material selection and trial-and-error testing played a large role in development.