Best Practices: What Manufacturing Activities Qualify for the R&D Credit?

Elaine Guan answers:

A: Generally speaking, qualifying activities for R&D are those that are innovative in nature and further develop or improve a product or process. Qualifying activities for manufacturing are no different! Below are some examples of qualifying and non-qualifying activities that might apply to manufacturing products or processes.

Manufacturing – Qualifying Activities

• Designing or engineering new product designs
• Modeling, building, or testing prototypes
• Performing manufacturing test runs on new products
• Modifying manufacturing processes to improve quality, speed, yield, or efficiency, or to reduce cost or waste
• Quality testing new products prior to them becoming commercially available
• Serving as a liaison between customers and the development team to identify desired design improvements

 Manufacturing – Non-Qualifying Activities

• Manufacturing of existing products
• Repairs and maintenance
• Customer technical support or helpdesk
• Post-release testing, analysis, or quality testing
• Time spent working outside the US

Other non-R&D related matters (e.g., HR, management, budgeting, marketing, manufacturing, customer relations, training, 2^nd level and above management, etc.)

Disclaimer: The information on this website is for general information purposes only. Nothing on this site should be taken as legal advice for any individual case or situation.