Manufacturers often aren't aware they can get research and development tax credits from the state and federal government to fund the investments they make to fuel innovation, according to the New Jersey Manufacturing Extension Program.
"Many manufacturers are unaware that their past or current efforts actually qualify for R&D tax credits," said Tony DeSantis, NJMEP's vice resident of business development. "It's a golden opportunity for businesses to improve their cash flow and ultimately become more profitable."
DeSantis said there is no up-front charge for NJMEP to do an assessment of a manufacturer's eligibility for an R&D tax credit; if the business qualifies, NJMEP charges a fee to handle the application. NJMEP, in Morris Plains, is a nonprofit that works to improve manufacturing competitiveness in New Jersey.
DeSantis said securing R&D tax credits in the manufacturing industry is more complex than it is in other fields. The process requires a specific understanding of regulatory requirements and the ability to provide detailed documentation of related activities.
DeSantis said NJMEP worked with a New Jersey company that made tubing out of metal alloys. The company developed a method of producing the tubing more efficiently, and in the course of that work discovered that a new version of the tubing had an application in the aircraft engine industry.
"Besides the normal white-coat laboratory R&D, there are other activities" that can qualify for R&D tax credits, he said. For example, the time company executives spend overseeing new product development may be included in the R&D tax credit application.
Reporter Beth Fitzgerald is @BethFitzgerald8 on Twitter.