Precision Motion Systems Manufacturer

Precision Motion Systems Manufacturer

Client Profile
The client is a designer and manufacturer of high-precision motion systems with two decades of experience in the industry, located in the Minneapolis area. Since 2019, the company has seen significant growth, increasing its number of qualified employees by 76%.

Process
Our R&D Tax Credits team was engaged to help the client determine which projects qualified for the R&D Tax Credit and identify eligible expenses. Our team conducted remote fieldwork with the company’s employees through email correspondences and conference calls. We interviewed key personnel to determine which activities and projects qualified as research in accordance with IRC §41 Credit for Increasing Research Activities.

A primary challenge in this study was quantifying the supply costs based on multiple design iterations and the client’s accounting processes for tracking these costs. Our team worked closely with the client to develop a methodology for accurately capturing these expenses within the framework of the R&D Tax Credit requirements.

Study Results
For the 2023 tax year, we calculated $3,096,554 in federal qualified research expenditures (QREs) related to the company’s design and manufacturing activities. This resulted in a total effective federal R&D Tax Credit of $195,199 for the client.