What counts in your plant
Work you already do- New productsDesigning and proving out something your plant hasn’t built before.
- New lines and equipmentGetting a new machine or line to run at rate and hold spec.
- Process changesTrial runs to raise yield, cut scrap, or shorten a cycle.
- AutomationProgramming and tuning robots, PLCs, and conveyors to take over a manual step.
- Tooling and fixturesDesigning jigs, dies, molds, and fixtures that hold up in production.
- Materials and suppliersSwitching a material, resin, or supplier and working out what changes.
- Custom ordersEngineering a one-off build to a customer’s spec at a fixed price.
- Testing and qualityBuilding the test or inspection step a new product or tolerance needs.
The four questions, for manufacturers
§41's four-part test- Did you make a product or process new to your plant?It doesn’t have to be new to the industry. A new way to run an old product counts.
- Did it take real know-how?Mechanical, electrical, chemical, or materials know-how. Programming a PLC counts. So does tuning a press.
- Were you unsure at the start?Would it run at rate? Would it hold spec? Which setup would get it there?
- Did you try options to find out?Trial runs, scrapped first articles, and revised setups are exactly that.
Unsure about any of these? That's what the call is for. The four-part test in plain English
Manufacturers ask
Does a new line or machine count?
The equipment itself doesn’t, since it gets depreciated. The time and material it takes to get it running at rate can count.
Does material from trial runs count?
Often. Material used up in test runs, first articles, and prototypes can count. Product you ship and get paid for usually doesn’t.
Do process improvements count, or only new products?
Both. Raising yield, cutting scrap, or shortening a cycle can count when you had to test your way there.
We knew we’d get it working eventually. Does that rule it out?
No. The question is whether you knew how at the start: which setup, design, or material would get you there.
Do operators’ hours count, or only management’s?
Both. Operators running trials, the techs setting up the line, and whoever oversees the work can count, for the share of their time it took.
A project took us years to get right. Is there a limit?
There’s no cap on the hours. Each year’s share of the work counts toward that year’s credit.
Our customer pays for the job. Is it still our research?
Yes, when you quote a fixed price and eat the cost if it goes wrong. Jobs billed by the hour until done usually don’t count.
We don’t run job costing. Can we still claim materials?
Yes. We work from your purchases and how your jobs run, and agree with you on a fair share for development work.
Filing, how far back, exams, and costs: common questions.
Give us thirty minutes.
Bring whoever ran your last new line or product launch. You'll leave knowing whether your projects qualify.
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