What counts in your shop
Work you already quote- CAM programmingBuilding toolpaths for a geometry you haven't cut before.
- Fixtures and workholdingDesigning a fixture that holds an awkward part through every op.
- First article and PPAPRunning, measuring, and revising until the part passes.
- Tolerance and finish trialsChanging speeds, feeds, tooling, and coolant until it holds.
- New materialsWorking out how to cut an alloy, plastic, or composite without scrapping it.
- Cycle time and scrapTrial changes on a running job to make it faster or cleaner.
- PrototypesMachining a customer's design and fixing what doesn't work.
- New machines and multi-axisMoving a part onto a five-axis, a robot cell, or a new machine.
The four questions, for machine shops
§41's four-part test- Did you make a part or process new to your shop?It doesn't have to be new to the industry.
- Did it take real know-how?Your work rests on mechanical engineering and materials science.
- Were you unsure at the start?Can we hold that tolerance in that material at a price that works?
- Did you try options to find out?Setup trials, scrapped parts, and revised programs are exactly that.
Unsure about any of these? That's what the call is for. The four-part test in plain English
Machine shops ask
We make parts to the customer's print. Is that research?
The print says what the part is. When you don't know how to make it or hold it, working that out is the research.
Do scrapped first articles count?
Often. Scrap from a first article or setup trial on a new part is a record of testing, and the material can count as a supply.
Does the credit cover new machines?
No, equipment gets depreciated. The time and material spent proving out a job on the new machine can count.
We don't have an engineering department. Do we qualify?
Yes. The credit follows the work, not the job title. A machinist working out how to make a new part can be doing qualifying work.
Filing, how far back, exams, and costs: common questions.
For your CPA: where the credit goes on Form 1120, 1120-S, 1065, or 1040.
Give us thirty minutes.
Bring whoever proves out your new parts. You'll leave knowing whether your jobs qualify.
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