How the R&D Tax Credit Works for Small Manufacturers

Episode 3 of The Tax Strategy Podcast digs into the Research & Development tax credit — often thought of as a Silicon Valley perk but actually a powerful tool for small manufacturers and product-based businesses. Lucas explains how a mid-sized Ohio machine shop named Precision Tool & Die claimed over $80,000 in credits by retrofitting CNC equipment and testing new alloys. Luna asks about the tricky 'four-part test' the IRS uses to qualify activities, and whether startups can offset payroll taxes with the credit. The hosts walk through actual qualifying vs. non-qualifying costs — including why routine software development rarely counts but custom automation projects often do. They also touch on the 2025 IRS guidance that expanded the definition of 'qualified research' for small firms under $50 million in gross receipts. If you run a business that builds, prototypes, or improves physical products, this episode may save you thousands. #RDTaxCredit #ResearchAndDevelopment #SmallBusiness #Manufacturing #TaxStrategy #IRS #PayrollTax #Innovation #PrecisionToolAndDie #Ohio #CNC #TaxCredits #Prototyping #BusinessTax #Finance #FexingoBusiness #BusinessPodcast #TaxPlanning Keep every episode free: buymeacoffee.com/fexingo