R & D Tax Credit Qualified Activities
Qualified R&D Activities by Industry
Breweries
Development of New Beer Recipes:
○ Creating new beer flavors, styles, or recipes.
○ Experimenting with different ingredients (hops, malts, yeasts, adjuncts).
Improvement of Brewing Processes:
○ Enhancing fermentation processes.
○ Developing new brewing techniques to improve efficiency.
○ Reducing waste or improving sustainability in brewing processes.
Development of Brewing Equipment:
○ Designing or modifying brewing equipment for better performance.
○ Implementing automation in brewing processes.
○ Prototyping and testing new brewing machinery.
Quality Control and Testing:
○ Conducting tests to ensure consistency and quality of beer.
○ Implementing new quality control procedures.
○ Analyzing and improving the stability and shelf life of products.
Packaging Innovations:
○ Developing new packaging methods to extend product life.
○ Innovating in labeling and bottling to enhance consumer experience.
General R&D Activities for Breweries
1. Software Development:
○ Creating software for tracking production, inventory, and sales.
○ Developing apps or systems for customer engagement or loyalty programs.
2. Environmental and Sustainability Projects:
○ Researching and implementing environmentally friendly techniques and process changes.
○ Developing methods to reduce carbon footprint and waste Product Scaling and Commercialization
3. Product Scaling and Commercialization:
○ Scaling up from pilot batches to full production while maintaining quality.
○ Developing processes for large-scale production of new products.
Wineries
Development of New Wine Varieties
o Creating new wine blends or varietals.
o Experimenting with different grape combinations and fermentation techniques.
Improvement of Winemaking Processes
o Enhancing fermentation and aging processes.
o Developing techniques to reduce sulfites or other additives.
o Implementing sustainable winemaking practices.
o Evaluating new techniques to minimize smoke exposure.
Viticulture (Grape Growing) Innovations
o Experimenting with new grape-growing techniques.
o Developing disease-resistant grape varieties.
o Improving irrigation and soil management practices.
Development of Winemaking Equipment
o Designing or improving equipment used in winemaking.
o Implementing automation in the winemaking process.
o Testing and prototyping new machinery.
Quality Control and Testing
o Conducting tests to ensure consistency and quality of wine
o Implementing new quality control measures
o Analyzing and improving the stability and aging of wines
Packaging and Bottling Innovations
o Developing new packaging techniques to preserve wine quality
o Innovating in bottle design and labeling to enhance market appeal
General R&D Activities for Wineries
1. Software Development
o Creating software for tracking production, inventory, and sales
o Developing apps or systems for customer engagement or loyalty programs
2. Environmental and Sustainability Projects
o Researching and implementing environmentally friendly techniques and process changes
o Developing methods to reduce carbon footprint and waste
3. Product Scaling and Commercialization
o Scaling up from pilot batches to full production while maintaining quality.
o Developing processes for large-scale production of new products.
Distilleries
o Enhancing filtration or fermentation processes or inventing new ones
o Recipes for taste, texture, and aroma profiles
o Using automation or robotics to increase product quality or distillation efficiency
o Mash heating methods and enzymes
o Researching secondary maturation procedures to improve taste (like stout beer barrels or wine and
sherry casks)
o Creating novel or enhanced distillation methods
o Introducing new waste management or recycling methods
o Creating and assessing prototype batches or improving production procedures
o Developing software to improve manufacturing, distribution, or on-site client experience (tasting
rooms)
Food & Beverage
o Development and formulation of new food products
o Development of new beverage formulations
o Development and formulation of new beers or brews
o Improvement of fermentation processes
o Development and enhancement of new flavors including sweeteners
o Design and development of new or improved packaging solutions
o Design and development of manufacturing or logistical equipment
o Testing and experimentation for food safety
o Improving the shelf life of existing products
o Improving flavor and texture profile of food items
o Analyzing samples for microbiological content
o Testing products for sodium content and other nutritional factors
o Development of chemicals or fertilizers used in food development
o Improving processes to reduce or eliminate possible contamination
o Automation of labor intensive processes
o Development of software used in production systems
Contract Manufacturers
o Development of production processes based on final part design
o Evaluation and modification of components to optimize manufacturability
o Use of CAD software
o Testing and validation of prototypes and first articles
o Development and modification of 3D design models
o Development of automated production cells
o Development of custom tooling, fixtures, and dies
o Experimentation to increase product yield and decrease production time
o Development targeting regulatory changes with regard to production processes or products
o CNC machine programming
o Quality assurance and testing protocol development activities
o Design and development of unique packaging solutions
Metal Fabrication Manufacturers
o Development of preliminary design during feasibility analyses of projects
o Experimentation to improve forming, cutting, joining, and grinding processes
o Creation of manufacturing processes to achieve a final part design
o Design of casting, cutting, folding, forging, extrusion, machining, punching, shearing, stamping and
welding processes
o Development of programs for automated production equipment including CNC machining
o Experimentation to identify inefficiencies in production to reduce waste and production time
o Development of unique surface treatment processes to achieve better part performance, reliability, or
quality
o Validation testing to determine final design of components and tooling
o Experimentation on secondary operations to improve overall part quality
o Development of strip layouts during feasibility and quoting
o Development of 3D models and experimentation via simulation
o Material usage improvements via modifications to machining, die casting or extrusion processes
o Optimization of geometry to minimize tooling complexity
o Development of software models to analyze material movement during forming
o Creation of prototypes and first articles for validation purposes
Plastics Manufacturing & Injection Molders
o Development of preliminary design during feasibility analyses of projects
o Development of casts and molds for designed components
o Development of programs for CNC and automated production equipment
o Development of automated processes to improve production output
o Experimentation to identify inefficiencies in production to reduce waste and production time
o Development of alternative mold designs to experiment with cavity geometry, core size, and gate
locations
o Evaluation of final part design for manufacturability
o Design and development of tools, molds, fixture, and jigs
o Optimization of processes to reduce and/or recycle waste
o Development of unique surface treatment processes to achieve better part reliability, performance, or
quality
o Performing simulations to predict how the plastic material will flow into a mold, the rate at which it will
shrink, and identify areas where defects and distortions may occur
o Experimentation to improve forming, cutting, joining, and grinding processes
o Low rate initial production and first article runs on newly developed or modified casts and molds
o Optimization of processes to reduce the need for secondary processes such as removing flash
o Validation testing to determine final design of components and/or tooling
o Conducting design testing to validate casts and molds for production purposes
o Experimentation on secondary operations to improve overall part quality
Tool and Die Manufacturing
o Designing new tools, dies, casts, jigs, and fixtures
o Experimentation to develop production processes
o Development of strip layouts during feasibility and quoting
o Development of 3D models and experimentation via simulation
o Material usage improvements via modifications to production process
o Optimization of geometry to minimize tooling complexity
o Development of software models to analyze material movement during forming
o Creation of prototypes and first articles for validation purposes
o Development of programs for automated production equipment including CNC programming
o Die construction and tool tryout activities
o Validation testing to determine final design of tooling
o Experimentation to determine the repeatability and quality of production processes
o Production of prototypes and low rate initial production for testing and validation
Consumer Goods Manufacturing
o Development of new or improved products
o Design improvements that increase functionality, reliability, performance, or overall quality
o Development of conceptual designs and definition of product requirements
o Evaluation of alternative raw materials for cost savings or product improvement
o Testing and validation of new or modified products
o Creation of prototypes and first articles
o Design and Validation of new or improved production processes
o Design and building of tooling, molds and fixtures
o Development of secondary operations such as coating and finishing processes
o Computer Aided Design
o CNC programming
o Finite Element Analysis (FEA) of product designs via computer simulation
o Rapid prototyping via 3D modeling and 3D printing processes
o Destructive and non-destructive testing of products for development and regulatory compliance
Architecture and Engineering
Architecture
o Development of schematic design, design development, and final construction documents
o Design modification to overcome conflicts when coordinating drawings from multiple trades
o Design of unique buildings and structures
o Development of unique/custom structural support solutions
o Evaluation of multiple design solutions for technical problems involving structural integrity and custom
architectural design elements
o Design activities including estimating and programming
o Design review and modification for cost reduction and energy efficiency
o Evaluation of alternative materials for unique design requirements (e.g. sound absorption, energy
efficiency, etc.)
o Development of architectural master plans
o Development of curtain wall, façade, and other building envelop systems
Engineering
o Foundation design based on geotechnical findings
o Development of design alternatives to overcome project site issues
o Structural designs for seismic retrofits
o Development of industrial processes for production facilities
o Environmental remediation activities
o Performing CAD & BIM modeling to develop 3D building plans
o Computer modeling and simulation of design and site conditions
o Utilization of AutoCAD, REVIT, BIM, HEC-RAS, STAAD, and ANSYS
o Design changes and modifications due to regulatory compliance issues
Construction-Mechanical, Electrical & Plumbing
General Construction
o Development of estimates based on designs provided by architects or engineers
o LEED and green initiatives
o Evaluation of engineering and construction methods for improvement in build time or overall
performance and reliability
o Development of prefabrication processes
o Development of unique material transfer systems on project sites (e.g. crane design)
o Development of temporary support structures for active construction
o Testing and validation of new mechanical systems to solve technical uncertainties
o Building Information Modeling (BIM), AutoCAD and Revit modeling activities
Mechanical, Electrical & Plumbing (MEP)
o Design and development of HVAC systems for new or existing structures
o Evaluation and calculation of structure needs and loads with regard to environmental systems
o Development of unique heat exchange, humidity control, and air filtration solutions
o Improvement of energy efficiency via system design
o Design and implementation of unique active/passive cooling solutions
o Design and development of control and instrumentation systems
o Programming to automatically monitor data and temperature controls
o Design and development of electrical systems
o Architectural lighting design
o Development of renewable electricity generation systems
o Development of backup power storage systems
o Design and development of control and instrumentation systems
o Design and development of plumbing systems
o Development of hydroponic systems
o Development of water distribution systems with regard to augmented use and load
o Development of greywater/blackwater recycling systems
o Development of coolant delivery systems for refrigeration
o Development of pressurized air, water, other substance distribution systems
o Design and development of sprinkler and fire protection systems
o Specialty system design such as clean rooms and bio-containment laboratories
Financial Services
o Design and development of new software components
o Design and development of Internal Use Software
o Development of analysis tools
o Developing data mining techniques
o Development of financial or pricing models
o Design and development of portfolio optimizers
o Quantitative research tool development
o Development of risk management systems
o Researching and developing algorithmic trading systems
o Developing simulators
o Design and development of trading platforms
o Block chain or cryptocurrency technologies
o Development of monitoring systems
o Developing gateways with exchanges
o Developing market feed handlers
o Reducing system latency
o Developing market data systems
o Insurance or agency systems development
o Developing actuarial systems
o Developing policy administration systems
o Developing mortgage loan and administration systems
o Integration of APIs and other technologies
o Developing proprietary banking systems and user tools
o Integrating disparate or legacy systems with new software
o Real estate systems
Software Development
o Design and development of new software components
o Design and development of new or improved software applications
o Internal Use Software development
o Virtual reality or game development
o Developing data mining techniques including big data analysis and processing
o Development of firmware
o Development of POS systems
o Integrating hardware and software components
o Development of document management systems
o Development of education-based software
o Design and development of CRMs
o Design and development of compliance systems
o Healthcare system and application development
o Development of financial and accounting software
o Developing simulators
o Development of data center tools
o Development of monitoring systems
o Development and integration of databases
o Designing and experimenting with computer hardware
o Reducing system latency
o Developing messaging technologies
o Network development and optimization
o Building QA or testing environments
o Integrating disparate or legacy systems with new software
Oil and Gas (“O&G”) Companies
o Development of unique drilling techniques (upstream, downstream, fracking)
o Software development for data acquisition or monitoring systems
o Improvements in tubing technologies
o Production optimization technology and improved geophysical and geological methods
o Design and development of new refined products, methods, and processes
o New products and processes for remediation, emissions, gas flaring and gas detection
o Design and development of unique onshore rigs and structures
o Offshore structure design with respect to:
>Generator and compressor modules
>Platforms
>Buoyancy
>Process modules
>Equipment skids
o Development and testing of plug and abandonment solutions
o Development and testing of turnaround and shutdown services
o Plant design with respect to:
>Pressurization
>Safety
>Chemical segregation
>Environmental and pollution control systems
o Design, development, and testing of drill pipe, collars, connectors, and other drilling accessories
o Design, development, and testing of drill bits of various sizes
o Design, development, and testing of well completion tools and equipment
o Fabrication and assembly of prototype units
o Improvements in the manufacturing process for existing products
o Development of new software specific to the oil and gas industry
o Wastewater treatment solutions
o Design and development of containment systems
o Fuel combustion testing
o Field testing activities and other technical services
o Environmental testing and remediation
Pharmaceutical/Nutraceutical/Bioceutical
o Development or improvement of formulations to improve shelf-life, reaction time, efficacy, or
consistency
o Experimentation with alternative materials and formations
o Assay development
o Development or improvement of production processes including scale up batches
o Trials for scaling up to production from a lab setting
o Testing of formulations for regulatory compliance
o Development of automated production processes
o Development of active ingredients to target specific outcomes
o Development of unique packaging solutions and processes
o Creation of pilot plant for creating validation batches of unique formulations
o Quality control activities
Mortgage Banking
o Development of pricing engines for loan products
o Development of Loan Origination System (LOS) platforms
o Integration and validation of new technologies and/or modules
o Development of both front end and back end systems
o Development of data warehouses and/or database systems
o Development and use of simulation environments for testing
o Development of data analysis and validation tools
o Development and integration of Security Information and Event Management (SIEM) technologies
o Development of conceptual software wireframes
o Validation of code via integration, performance, systems, interface, regression, load, stress, security,
and reliability testing
o Creating scalable platforms for future technology and software development
Aerospace Manufacturers
o Design and development of aircraft, aerospace and weaponry components
o Experimentation to optimize production processes to increase output, improve performance, or
reduce waste
o Development of secondary operations such as surface treatment of metals
o Development and testing of new composite materials
o Development of prototypes and first articles for design and performance validation
o Design modifications for regulatory compliance
o Development of software programs to automate production equipment
o Metallurgical, tensile, gate freeze studies for product/component evaluation
o Development of tooling, dies, fixtures, for new or improved production processes
o Quality control activities for testing of new components or prototypes
Blockchain
o Development of new blockchains
o Development of decentralized applications
o Development of hardware and software wallet solutions
o Development of nodes
o Development of new user experiences (e.g. virtual environments, admin and user environments)
o Development of blockchain security infrastructure
o Development of asset management infrastructure
o Development of smart contract infrastructure
o Development of APIs
The Research and Development (R&D) Tax Credit remains one of the best opportunities for businesses to substantially reduce their tax liability.
No industry or business type is excluded, although by the nature of their activities, some are more qualified than others.
Case Studies
Contract
Manufacturer
Annual Revenue:
$63.1 million
Results
$1 million in federal & state R&D tax credits
Startup
15 Employees
Pre-Revenue
Results
$250k in federal R&D tax credits
Brewery
Annual Revenue: $24.3 million
Results
$1 million in federal & state R&D tax credits
Apparel Company
Annual Revenue: $1 billion
Results
$5 million in federal & state R&D tax credits
App Development
Company
Annual Revenue:
$3 million
Results
$375k in federal R&D tax credits
E-Commerce
Company
Annual Revenue:
$31 million
Results
$2.2 million in federal & state R&D tax credits
Digital Marketing
Agency
Annual Revenue:
$19 million
Results
$500k in federal & state R&D tax credits
Developer of Products
Annual Revenue:
$13.4 million
Results
$310k in federal R&D tax credits
PBIS
(Autism Programs)
Annual Revenue:
$60 million
Results
$2.5 million in federal & state R&D tax credits
Only $20 Billion out of the total $100 Billion available was claimed last year.
Only 30% of the businesses that the credit was created for actually claim it!
Tax Credit Highlights:
✓ Increased Cash Flow: Unlock additional capital that can be reinvested back into the business.
✓ Dollar-for-Dollar Tax Reduction: Benefit from federal and, in some instances, state tax reductions that directly lowers income tax.
✓ Retroactive Claims: Can claim credits for open tax years going back 3 years(4 in CA), providing an immediate financial boost.
✓ Reduced Tax Rate: Lower the tax rate of the business, enabling greater profitability in the long run.
