Identifying the type of tax credit a manufacturing company is eligible for can be a somewhat daunting task, specifically the research and development (R&D). Some Certified Public Accountant (CPA) firms are unfamiliar with the qualifications and the credit itself. In turn, businesses who qualify go many years without taking advantage of it. According to a recent article, this incentive is avail­able at both federal and state levels that can help engineering firms recover a significant amount of their R&D costs. Without the proper information, your business may be losing out on valuable tax credits and thousands of dollars.

Partnering with the right CPA firm who specializes in working with manufacturing/distribution and construction businesses can help recoup costs associated with R&D. Because the qualifications can vary depending on the individual business and its project(s), it is important to work with a knowledgeable CPA firm. This means that they can accurately provide clients with the details on whether they qualify for the R&D tax break or not. Firms who cater to other industries may not be as well-versed in these credits as they typically offer general services. Once the appropriate qualifications have been identified, the CPA specialists can keep track of future tax credits and incentives.

In addition, business that have seen other CPA's and were made aware of their eligibility may be able to go back to previous years in order to get money back from what is found in the qualification criteria. Doing so can help businesses invest this money into additional R&D and further their future tax credit eligibility. Once you have the information necessary, it can become easier to plan ahead and ensure that your business meets the qualifications for the R&D tax credit. However, it is important to keep in mind that all projects should be carefully documented in order to ensure that you take full advantage of the R&D tax credit in years to follow.