Why formulators qualify
The four-part testNew formulas count as R&D
A formula only has to be new to your company to count. It does not need to be new to the industry.
Every formula has unknowns
Will it stay stable, and will it scale? Answering that is qualified work.
Bench trials are experimentation
Lab batches, stability tests, and revised formulas satisfy the experimentation test. Your lab notebook is the evidence.
The science is already there
Your work rests on chemistry. For formulators, the science test is the easy part.
A short study shows which of your formulas qualify, and proves it. Read the four-part test in the words of the statute.
What qualifies in practice
Work your lab already does- New product formulationDeveloping a coating, cleaner, lubricant, or personal care product to meet a performance target is qualified development.
- ReformulationReplacing a restricted ingredient or a lost supplier while holding performance takes trial batches that count.
- Stability and shelf-life testingAccelerated aging, freeze-thaw, and compatibility tests on a new formula are experimentation on the record.
- Scale-upMoving a bench formula to a production reactor or mixer raises questions that only pilot runs answer.
- Application and performance testingTesting adhesion, coverage, cleaning power, or corrosion resistance against a standard is qualified work.
- Regulatory-driven developmentReaching a VOC, safety, or labeling requirement without losing performance is technical iteration.
- Packaging compatibilityTesting whether a formula attacks its container, valve, or closure is development work, not overhead.
- Process improvementChanging order of addition, mixing, or temperature profile to fix a batch problem is qualified problem solving.
Where the credit comes from
The expenses that countLab and production wages
The time your chemists, technicians, and production leads spend on qualified formulas is the largest piece for most companies.
Raw materials
Ingredients and packaging consumed in bench, pilot, and stability batches can count as supplies.
Outside labs
A share of what you pay U.S. testing labs and formulation consultants on qualified work counts too.
What does not count
Routine production of a settled formula, quality control on shipped product, and marketing stay out. The study draws that line honestly.
Common questions
We make private label products. Do we qualify?
Often. Developing a formula to a customer's specification is research when your company carries the technical risk and the formula stays yours to use.
We reformulated because of a regulation. Does that count?
Yes. Meeting a new requirement without losing performance is a technical problem, and the trials to solve it qualify.
Does a formula that never launched count?
Yes. The credit rewards the attempt. A formula that failed stability is evidence of experimentation.
Do we need a formal R&D department?
No. The credit follows the activity, not the title. A production chemist running trial batches is doing qualified work.
How far back can we claim?
Up to three prior tax years, by amended return. Credits you never claimed are still there to collect.
What records do we need?
The ones you already keep. Lab notebooks, batch records, test results, specifications, and invoices are the evidence. The study organizes them against the test.
What happens if the return is examined?
The people who wrote the study answer for it. Audit defense is included in every study at no added cost.
Which form does the credit go on?
Form 6765, filed with the return. From there it carries onto Form 3800 as part of the general business credit. The Form 6765 guide and the Form 3800 guide walk a CPA through both.
Thirty minutes shows whether you qualify.
Book a call and bring the person who knows the work. We will cover whether your projects qualify and what a credit could be worth.
Book a call Or write to inquiries@thefoundryfirm.com