Why electronics manufacturers qualify
The four-part testNew boards count as R&D
A design or process only has to be new to your company to count. It does not need to be new to the industry.
Every design has unknowns
Will it meet the spec, and will it survive the field? Answering that is qualified work.
Bring-up is experimentation
Prototype runs, test failures, and revised layouts satisfy the experimentation test. Your change log is the evidence.
The science is already there
Your work rests on electrical engineering and physics. For manufacturers, the science test is the easy part.
A short study shows which of your products qualify, and proves it. Read the four-part test in the words of the statute.
What qualifies in practice
Work your company already does- Circuit and board designDeveloping a schematic and layout to meet a performance spec is qualified development.
- Firmware and embedded softwareWriting and testing the code that makes the hardware work is software development under the statute.
- Prototype buildsBuilding a first article, finding what fails, and revising the design is the experimentation test at work.
- Compliance testingGetting a design through EMI, safety, or environmental testing takes alternatives and revision. Those count.
- Process developmentDeveloping the assembly process, reflow profile, or test fixture for a new board is process research.
- Contract manufacturingWorking out how to build a customer's design repeatably and to yield is qualified process work.
- Component substitutionReplacing an obsolete or unavailable part and requalifying the design is technical iteration.
- Enclosure and thermal designManaging heat, fit, and durability for a new product raises questions solved by trial.
Where the credit comes from
The expenses that countDesign and production wages
The time your designers, technicians, and process staff spend on qualified products is the largest piece for most companies.
Prototype materials
Boards, components, and assemblies consumed in prototypes and test runs can count as supplies.
Outside design and testing
A share of what you pay U.S. design firms and test labs on qualified work counts too.
What does not count
Routine production of a released design, distribution, and marketing stay out. The study draws that line honestly.
Common questions
We build other companies' designs. Do we qualify?
Contract manufacturers qualify for the process work they own, such as developing the assembly method, fixtures, and test for a new board. The study separates that from the customer's design.
Does firmware count?
Yes. Firmware and embedded software developed and tested for your hardware is qualified work.
Do failed prototype runs count?
Yes. A run that did not yield is evidence of experimentation. The materials and time in it can qualify.
Our customer owns the design. Does that change anything?
It matters. Work the customer funds and owns outright is excluded. Work where your company carries the risk and keeps the right to use the result is not. The study reviews the contract.
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. Schematics, layouts, change orders, test reports, yield data, 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