Innovation Research and Development

Research And Development Leads To Innovation

Manufacturers can achieve significant results from innovation driven by solid research and development. Research and development not only sparks new products, but also brings new efficiencies and processes to successful manufacturers every day. It’s undeniable that the outcomes are critical to the growth of the manufacturing sector in New Jersey and all across the nation

Research And Development Leads To Innovation.

Tax Credits for Research and Development

Since 1981, research and development tax credits have been available to manufacturers to help them design products, refine processes, save money and reduce energy usage. Many people in the manufacturing industry may not be aware that the design activities taking place at their facility today are actually eligible for tax credits!

What Types of Activities Qualify for Tax Credits?

As most business owners are painfully aware, tax credits aren’t widely advertised, so it helps to have an expert show you what you’re missing. Understanding tax credits takes a full-time effort from an entire team.

The New Jersey Manufacturing Extension Program (NJMEP) has staff specialists who know how to dig out the research and development tax credits that manufacturing facilities may be missing – and they are saving them big money. If your research and development efforts meet Federal requirements, there are extensive credits available. The credits can be applied to current taxes due or future tax liabilities.

Even better, they may be applied retroactively for three years in addition to the current year. They may even carry forward for as long as 20 years!

The Importance of Research and Development

The importance of research and development, and by extension, innovation, cannot be emphasized enough. Competition and globalization drives small business owners and large corporate executives alike to constantly reinvent products and processes to compete. A change in customer tastes, pressures of increasing material prices, as well as energy costs all squeeze the bottom line. This all requires a creative approach and new ideas driven by good data that only comes from expert research and development.

Examples: Successful Outcomes from Expenditures that May have been Overlooked 

  • An injection molder developed new product configurations and designs that led to a reduction in plastic used and increased production of multiple units simultaneously. For these efforts, the company received a tax credit of more than $385,000.
  • A rubber manufacturer worked to develop a new material that would be less permeable and 50 percent stronger than the existing material. The new fabric provided superior weather resistance and improved water-shedding characteristics. This group booked a $90,000 tax credit.

Research and development drives innovation across the manufacturing industry. It’s easy to overlook some big tax credits with an extra set of eyes. All it takes is a 10-minute conversation with NJMEP R&D Tax Credit specialist to learn about your eligibility. Visit the R&D Tax Credit page today for more information or contact John W. Kenney, Ph.D., COO of NJMEP at (973) 998-9801.

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