Posted by Jeffrey Feingold on 04.05.23

3D printing has the potential of revolutionizing the way we make almost everything, including matzoh. Matzoh is an unleavened flatbread that is a staple in Jewish cuisine and forms an integral element of the approaching Passover holiday starting on April 5, 2023. Many bakers and chefs across the world are utilizing innovative 3D printing to push the limits of traditional matzoh production. 3D printing makes it possible for Jewish families to have designs that are delicate, intricate and precise. Having a family name, Hebrew proverbs or sayings printed into their family’s matzoh, marking the occasions and making special memories for future generations. Using a 3D printer, a baker can control the nutritional content of the matzoh like the vitamins, minerals, proteins and carbs. The research that goes into the 3D printer itself as well as the ingredients and innovation with the matzoh printing process, can qualify for research and development tax credits offered by the IRS.

The R&D tax credit allows companies that perform technological research to receive tax breaks on certain costs associated with research as long as it was performed in the United States. Bakers and chefs utilizing 3D printing should be taking full advantage of the R&D tax credits offered by the IRS to invest more into their company, help increase their ROIs and minimize their future costs of investing. Eligible costs include wages, cost of supplies, cost of testing, contract research expenses, and costs associated with developing a patent. R&D tax credits are given to businesses that are performing research or development that improve the product, processes involved in producing the product or technology.

The following are a few examples of activities that may qualify as matzoh 3D printing research:

• Developing new or improved products, processes, or formulations
• Improving the product’s flavor, texture or shelf life
• Producing trial batches in a test kitchen
• Experimenting with substitution of ingredients such as low fat or organic ingredients that affect product consistency, quality, or texture
• Improving manufacturing processes to reduce waste
• Developing packaging with improved shelf life, product quality and longevity
• Incorporating newer materials and equipment in food processing and packaging to reduce waste or improve environmental impact
• Evaluating new or improved products and formulations to meet specified nutritional parameters
• Developing new or improved processes to scale up production of products and maintain desired characteristics of the product
• Testing products and formulations for desired characteristics

The activities and associated expenditures of a company can qualify for the R&D tax credit if the activities meet the four-part test established by the IRS:

1. Qualified Purpose – The purpose of the research must be to create a new or improved product, process, or formulation, resulting in increased performance, function, reliability or quality.
2. Technological in Nature – The research must rely on the hard sciences, such as engineering, physics, chemistry, biology or computer science.
3. Process of Experimentation – Experimentation can be demonstrated through test batches, simulations, systematic trial and error, or other methods of evaluating alternatives to achieve a desired result.
4. Elimination of Uncertainty – Activities must overcome some unknowns, such as uncertainty as to capability, optimal design, or optimal methodology. 

The 3D printing market continues to experience rapid growth, and with \new options of printing food products like matzoh the growth potential is endless. Bakers and chefs utilizing 3D printing should not only take advantage of the federal R&D tax credits, but also investigate if their state is one of the many states that offer tax benefits as a means for promoting growth and development as well as creating new jobs. A qualified R&D credit professional from Tax Point Advisors can conduct a thorough R&D tax credit study to assess which activities meet the IRS’ four-part test to qualify for the credits.

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

Tax Point Advisors provides R&D tax credit study services and other specialty tax services to CPA firms and their clients throughout the U.S. To learn more about R&D tax credits from the experts at Tax Point Advisors, please call us at (800) 260-4138 or please leave us a message below.