Posted by William Mehi on 06.19.25

As the owner of a job shop, do you know that you may qualify for valuable research and development (R&D) tax credits? That means you can receive large sums of money for activities you and your employees are already conducting in your shop. In fact, the R&D tax credit is one of the most lucrative federal tax credits available, and most states have implemented their own programs modeled on the federal program.

For a long time, R&D tax credits were largely associated with scientists and medical researchers with large organizations. That is no longer the case. Even better, Congress made the R&D tax credit permanent in 2015.

Read our FREE guide: The Business Owner's Guide to R&D Tax Credits

The IRS defines R&D as the design or development of a new product or process to a company as opposed to your entire industry. This includes customization work – including prototypes – often performed by manufacturing companies and job shops. Build-to-print jobs often qualify because they involve work customized for your customer. Even trial and error work that goes into problem-solving can qualify.

Other examples of work done to improve or introduce a new product or process include:

• Evaluation of alternative materials
• Automated, streamlined or improved internal processes
• Creation of improved or more reliable products, formulas or processes
• CAD/CAM design
• Welding procedure development
• Product improvement or equipment improvement
• Welding procedure development
• Lean manufacturing projects
• Design and development of specialty tooling and fixtures

Actually, there is a four-part test that will help you determine whether your activities qualify. A professional R&D expert can help ensure you qualify for the tax credits and help you with the documentation you will need.

For example, Tax Point Advisors, a firm with expertise in working with small and midsize companies, conducted a R&D tax credit case study for a New England manufacturer and custom job shop that continuously improves products and production processes. While we estimated a mid-six-figure credit range during the initial assessment, we were able to find 16 percent more credits than the high end of the estimate. Read the full success story.

Find Out if Your Activities Qualify

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, call us at 800-260-4138 or please leave us a message below.