Metal Fabrication Industry

Since we are not developing or designing an end product, does advancing or the metal fabrication product/process qualify for the R&D Tax credit? Yes, metal fabrication can qualify for the R&D Tax and it can apply to taxpayers who are improving their overall metal fabrication process, along with process efficiencies and/or making it environmentally friendly.

So the big question is what can a company in the metal fabrication industry expect to receive as a credit? Well there are many variables that dictate the amount of credit a company may receive. In most cases, the head count and salaries related to both the technical and support employees that contribute to the development effort typically drive the amount of credit. The technical and support backgrounds may include the following, but are not limited to: metallurgists, scientist, chemists, and process engineers. Given the varying amounts of head counts and salaries that could exist in any company and to help simply the answer to the question above, below are some of the latest statistics provided by the IRS for companies in the metal fabrication industry that claimed Federal R&D Tax Credits:

Industry                                   # of Clients                  Filed Avg. Credits

Metal Fabrication                              556                                      $99,027

• Developing and designing specific molds for customers
• Improving effective and efficient welding and product installation processes
• Designing & testing fabricated tangible prototypes and/or computer modeling
• New or improved materials to increase the following: products quality, product performance and improve both the internal and customer’s manufacturing processes