Posted by Jeffrey Feingold on 06.27.17
Aerospace Industry Trends
It is an exciting time for research and development (R&D) in the aerospace industry—with strong growth in 2016 after several years of stagnancy, the outlook is healthy for the development of groundbreaking technology. Much of the need for improvement stems from a set of conditions that begins with rapidly aging fleets and the demand for more fuel-efficient, technologically advanced aircraft. This has resulted in a backlog of jet orders. Further, advanced manufacturing technology requirements, the wider use of composites and conversion to new electrical systems are driving the need for sweeping improvements.
These conditions make aerospace ripe with opportunities for technological advancement that will have ripple effects across the design chain. As the need for more advanced platforms drives innovation, aerospace industry personnel are spending a significant amount of time on qualified R&D activity in performance-related design improvements and exacting standards of precision in manufacturing practices, and this activity may result in valuable R&D tax credits.
As a prime example, hush houses, which are noise-suppressing aircraft jet engine testing enclosures, are being used to test installed or uninstalled jet engines under actual load conditions. An extensive amount of R&D is put into the design of air intake, air exhaust and safety systems for these indoor engine test cells that must achieve certain performance standards for blocking the transmission of noise, while optimizing engine air flows and providing safety for testers during unanticipated emergency situations, such as during an engine explosion.
Whether you are an engineer, designer, contractor or machinist, there is a good chance that you may not be aware of the opportunity to claim a significant amount of R&D tax credits for eligible activities you are already conducting.
Watch for our next blog on the aerospace industry when we take a closer look at which activities in the aerospace industry are likely to qualify for R&D tax credits.
Find Out if Your Activities Qualify
The R&D tax credit can be a lucrative incentive for aerospace businesses. Given the new permanent nature of the federal tax credit, now is the time to consider whether activities performed by your company qualify for major cash-saving tax credit opportunities.
Tax Point Advisors, a firm with expertise in working with small and midsize companies, works with businesses that may qualify for R&D tax benefits. For more information, read our e-book: The Aerospace Industry Guide to R&D Tax Credits. You may also reach us at 800-260-4138 or leave us a message below.