R&D Tax Credit Solutions for System Integration Companies

One of the fastest growing areas of innovation in the U.S. centers on the automation of industrial manufacturing processes. System integrators, controls engineers, and robotics engineers must engage in R&D on a daily basis to solve the manufacturing automation faced by their clients. Since most of these projects are done under a fixed-price contract structure, companies engaging in the manufacturing system integration process are perfect candidates for the R&D Tax Credit. Below are some of the activities in this industry that constitute qualified research:

Concept design and modeling pre-contract award
Systems engineering and layout design
Throughput and rate calculations
Throughput simulation
Robotics simulation
Robotics architecture design and programming
Analysis of alternative system concepts
Development of PLC architecture
PLC programming
Development of WCS or WMS architecture
WCS or WMS software development
Development of HMI architecture and logic
Design and fabrication of mechanical components
Design and fabrication of electrical panels
Problem solving during mechanical/electrical installation
Startup testing
PLC revisions during startup

All of these activities are generally focused on eliminating uncertainties that stand in the way of taking a manufacturing or distribution system from concept to fully functional at the client site. They require engineers to evaluate numerous alternative techniques, designs, and formulas along the way. The fact that many integrators guarantee their system for 1-2 years after installation further shows how the technical and financial risk of failure in the industrial automation world is carried by the engineering firms who design these complex systems.

If your company designs manufacturing or distribution lines, designs individual automated machines as components of an overall plant process, develops the PLC or software needed to power an automated process, or programs robots, a large portion of engineering and engineering support salaries can be allocated toward the credit. It is not unusual for firms heavily involved in this type of engineering to see 80% or more of their payroll captured toward this credit.

To see how much R&D Tax Credit benefit your firm can obtain for its day-to-day activities, please contact Alternate Tax Solutions today, or visit our free R&D Tax Credit estimator.

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