Small business survival and growth requires adequate working capital. One overlooked source of cash for New Jersey manufacturers is the Research and Development (R&D) tax credit. This incentive helps companies to grow by reducing its tax liability for qualified R&D expenditures.
Most manufacturers are unaware that their efforts in designing quality products qualify as R&D, and may make them eligible for tax credits for expenditures associated with these activities. R&D credits may be applied to taxes due or to future tax liability, and they may be retroactive for three years in addition to the current year and carry forward for twenty years! These credits can additionally be used to reinvest in the company.
NJMEP’s experts have experience identifying, qualifying and quantifying the expenditures of manufacturers. Areas of analysis include:
- Salaries and wages of the engineers working on a project
- Cost of supplies
- Third party contractor fees getting prototype parts made by a rapid prototyping service center
- Tasks performed by executive leadership
- Legal, sales engineers, operations and IT
Tax Credit Estimator
NJMEP offers a complimentary calculator so that manufacturers can estimate their potential savings.
Click here to access the estimator tool.