Industry Brief  ·  Metal Fabrication

Your weld procedures are research.

The federal R&D tax credit pays for the design and process work behind a custom job. Most fabricators never claim it.

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It costs nothing to find out. If there isn't enough credit to be worth claiming, you don't pay a thing.

New to youis enough. A joint, material, or design your shop hasn't built before can count when you had to test your way to it.
4 years of creditin one study: this year, plus past years still open to amend, usually three.
Exam supportcomes with every study. If the IRS asks, we answer.

What counts in your shop

Work you already quote
  • Shop drawingsTurning a customer's concept into details you can actually build.
  • Weld proceduresDeveloping and testing a procedure for a new material, thickness, or joint.
  • Distortion controlWorking out sequence, fixturing, and heat input so the weldment stays flat.
  • Jigs, dies, and fixturesDesigning the tooling a new part needs before the first one is cut.
  • Prototypes and first articlesBuilding the first piece, finding what fails, and revising the design.
  • Forming and bendingTrying bend sequences, tooling, and material until the geometry comes out right.
  • Load-bearing designSizing members and connections for a custom frame, platform, or enclosure.
  • New equipmentBringing a part onto a laser, press brake, or robot cell and proving it out.

The four questions, for fabricators

§41's four-part test
  1. Did you build a design or method new to your shop?It doesn't have to be new to the trade.
  2. Did it take real know-how?Your work rests on metallurgy and mechanics, whether or not anyone calls it that.
  3. Were you unsure at the start?Will it hold the load? Will it stay flat after welding?
  4. Did you try options to find out?Weld trials, mockups, and revised shop drawings are exactly that.

Unsure about any of these? That's what the call is for. The four-part test in plain English

Fabricators ask

We fabricate to the customer's drawings. Is that research?

The drawings say what to build. Working out how to weld, form, or hold tolerance on something your usual methods can't handle can be research. The study checks the contract too.

Do test coupons and scrapped pieces count?

Yes. Material used up proving out a procedure or a first article shows you experimented, and it can count as a supply.

Does repair work qualify?

A standard repair doesn't. Designing a repair method for a problem the usual fix can't handle can.

We're a small shop with no engineering staff. Do we qualify?

Yes. The credit looks at the work, whatever the title. A fabricator testing a new weld procedure until it holds 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.

Other industry briefs

Where else it lands
Plastics and Injection Molding

Every mold is an experiment.

New mold design, sampling, and process windows can be development work the credit rewards.

Read the brief Boat Manufacturing

Every boat is a prototype.

Developing a new hull or model can qualify, even when that first boat sells.

Read the brief Manufacturing

Every new line has a rough first month.

New products, new lines, and process changes can be development work the credit rewards.

Read the brief

Give us thirty minutes.

Bring whoever works out your custom jobs. You'll leave knowing whether your work qualifies.

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