Industries | R&D

R&D Tax Credit TOOL and DIE

R&D Tax Credits for the Tool and Die Industry

Tool and die manufacturers stand in a unique position when it comes to R&D qualification, given their specialized role in designing components, namely tools and dies, integral to end product manufacturing. Irrespective of whether the company is exclusively engaged in tool and die design or is also involved in the production process, both areas have potential for qualifying R&D activities.

Such companies are often deeply involved in refining production processes, crafting programming, and validating components. The nature of their specialization within particular industry sectors allows them to design and create precision tools or casts used to mold parts from various materials.

For many tool and die companies, direct labor is often the most significant R&D expense. However, one of the advantages of the R&D tax credit is its inclusivity of materials and supply costs, which often encompass the cost of the tooling and dies themselves. Additionally, qualified expenses extend to consumable supplies used in the shop for creating prototypes, as well as those used in the validation process for new or modified products.

Qualified Research Activities for
Tool and Die Manufacturers

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Tool and Die Case Study

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Highlights In
The Case Study

  • This company generate roughly $1.4MM in qualifying research and development expenses

  • Federal R&D tax Credit claimed annually: $95,000

With over 40 years of experience, this company has a highly experienced team of designers, engineers, tool makers and machinists who create dies to produce a variety of parts.

The company collaborates with clients, providing the necessary expertise and equipment for designing and building tools and dies while delivering a precise product that is in accordance with customer specifications.

Take Advantage of the R&D Tax Credit with Source Advisors

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.