Aerospace manufacturers often qualify for the R&D tax credit due to the extensive experimentation involved in developing high volume and highly complex production processes. Even aerospace companies not participating in overall product design can qualify. For example, a company may not design the final component, but the creation of the process to manufacture that component involves R&D.
Many aerospace manufacturers adopt a fixed-cost-per-piece pricing model, effectively taking on the cost of research and only receiving payment upon the successful completion of a production process. The expenditure associated with creating prototypes, initial versions, and validating these components is also covered by the R&D tax credit.
The broad spectrum of activities involved in aerospace systems engineering, including concept development, trade studies, feasibility assessments, requirements development, as well as the integration and testing of systems and subsystems, are all integral to R&D activities in the sector.
Moreover, aerospace companies often leverage sophisticated flight software, high-fidelity simulations, and mathematical models of spacecraft systems in their R&D efforts. These elements, despite their complexity, are key components of the innovation process within the aerospace industry, reinforcing the industry’s eligibility for R&D tax credits.
Combined Federal and State R&D tax credits realized over several years: $75,000
This aerospace company is a research and analysis services firm specializing in aerospace guidance, navigation and control (GN&C) design, analysis, integration, and testing.
Research and development emphasis is on rendezvous, proximity operations and capture of in-flight space flight phases including automated rendezvous and docking.
The company has extensive experience in crewed and un-crewed spacecraft, encompassing automated and manual flight design with emphasis on safety and mission success.
The R&D tax credit can help a wide variety of businesses offset and reduce their income tax liability, in addition to providing many other benefits. Our team of experienced CPAs, attorneys, engineers, and technology experts helps companies save money and create cash flow with R&D tax credits that can then help drive overall growth.