Posted by Jeffrey Feingold on 04.25.25

Does your aerospace business resolve technological challenges through the innovative use of processes and products? Despite its name, the research and development (R&D) tax credit program includes far more activities than research, patents and laboratory work. The R&D credit is intended for those in the aerospace industry who improve processes and products by making them more advanced, efficient and environmentally friendly. The credit is also intended for activities related to process design and development.

Because it is particularly reliant on intellectual property for its advanced products, the aerospace industry has a much higher level of R&D investment than typical manufacturers. Still, many employed in the industry are not certain which activities qualify.

Read our FREE e-book: The Aerospace Industry Guide to R&D Tax Credits

Think in terms of new techniques, formulas, processes, software, testing out new materials, and the design of any new projects, such as those involving new manufacturing methods. Do you use innova­tive materials to create more reliable, energy-efficient products or processes?

Listed are examples of the types of activities and projects that may qualify:

• Designing new or improved vehicles, equipment, components or facilities
• Designing, building and testing new technology
• Developing new or improved manufacturing methods
• Developing new or improved machining techniques
• Developing new or improved material composites
• Developing new or improved tooling
• Developing new or improved qualification testing or environmental stress screening
• Designing and fabrication of prototypes
• Improving automation processes
• Improving manufacturing processes
• Optimizing strength or minimizing the weight of components

With an understanding of the type of activities that qualify, how does an aerospace company qualify for R&D credits, and what are some circumstances unique to the industry?

Watch for our next blog on the aerospace industry when we take a closer look at which special considerations for aerospace companies, including when to apply credits and the intricacies of government contracts.

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.

Request a free assessment to determine qualifying R&D tax credit eligibility.

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.