There are many companies today that are missing out on an important tax saving opportunity, research and development (“R&D”) tax credits. One industry that is often overlooked is tool and die manufacturers. Only a small fraction of these companies are claiming the R&D credit, although the majority qualify for this valuable resource. The R&D credit is not just for scientists in lab coats, but for any industry driving innovation in the US. Tool and die manufacturers are a prime example of this type of innovation. These machine and job shops not only develop new molds, fixtures, punches, dies, and jigs utilizing the latest in technology, but also develop the most efficient processes to streamline the manufacturing of these items. It is precisely these activities that make tool and die manufacturers prime candidates for the R&D tax credit.
Recently, alliantgroup helped a small tool and die company to realize tax savings of over $365,000. This was a small company with a staff of close to 30 employees that specialized in automotive tooling. This company was referred to alliantgroup by their CPA and, like many other manufacturers, was not sure whether they qualified for the R&D credit. alliantgroup walked this company step by step through the qualification process and discovered several areas of the company’s expenditures that were able to be taken towards this credit through a thorough examinations of this company’s finances and activities. This example is only one of the many success stories in the tool and die industry.