R&D Tax Credits - Packaging Manufacturer

Packaging Manufacturer

Client Profile
A manufacturer in Michigan with about 50 employees designs and builds the physical control systems for conveyor systems used in packaging. McGuire Sponsel was initially engaged to do a current year study in 2020, then performed retroactive studies for 2018, 2019 and 2021 to maximize their return on investment for research and development.

Process
Our R&D Tax Credit Services team performed onsite fieldwork to interview potentially qualified employees from sales, to engineers, to the shop floor. We discussed their allocation of time to R&D efforts in detail while walking the facility to ensure no potential qualified research expenditures were overstated or overlooked. Our team kept in contact with the client throughout the process as more information became available to ensure the accuracy of the R&D Tax Credit claim.

With amended returns, the IRS requires extensive documentation for every qualified project, and this client in particular had over 350 projects. To ease the burden for the client, we compacted the project list and engaged them only to confirm any loose ends.

Study Results
In 2020, the client had $658,664 in QREs with an effective credit amount of $42,142. In 2018, 2019 and 2021 they had a combined amount of $1.8M QREs with an effective credit amount of $114,377.