Products, prototypes, tooling & process redesign
Estimate your credit →Designing products, building prototypes, and re-engineering production processes routinely require resolving uncertainty about whether a design or process will meet specifications — classic qualified research.
The credit is calculated on qualified research expenses (QREs) — primarily wages for engineers and technical staff who spend time on qualifying activities, plus supplies, cloud/compute, and 65% of qualified contract research.
The table below lists the business components that most often qualify, a common example, and the technical uncertainty that makes each one defensible.
| Business component | Example | Technical uncertainty |
|---|---|---|
| New product development | New consumer device or industrial component | Will the design meet performance and durability specs? |
| Prototyping & pilot models | Functional prototype or pre-production unit | Does the prototype resolve technical feasibility? |
| Tooling & fixture design | Custom molds, jigs, dies | Will the tooling hold tolerance at production speed? |
| Process / line redesign | Automated assembly line or new process flow | Which process parameters yield quality at scale? |
| Material selection / substitution | Alternative alloy, composite, or polymer | Will the new material meet strength, cost, and regulatory needs? |
| Automation & robotics | Robotic work cell, PLC controls | How to integrate automation reliably into the line? |
| Quality & test method development | New inspection method or test rig | How to detect defects without slowing throughput? |
| Additive manufacturing | 3D-printed end-use parts | Can additive meet structural and surface requirements? |
Wages for time spent on qualified research may count toward your credit. Percentages depend on facts and must be documented.
Illustrative example using sample figures. Your actual credit depends on your facts; see Form 6765 and consult a tax professional.
The IRS requires qualifying research to satisfy four tests. Here's how they typically map for this industry:
The activity aims at improving a product, process, software, or technique used in the business — not just a business outcome.
The work relies on principles of engineering, computer science, biology, chemistry, or another hard science to resolve uncertainty.
There was genuine uncertainty at the outset about whether — or how — the component could be built or improved.
The team evaluated alternatives: A/B tests, prototypes, benchmarks, simulations, or iterative design-build-test cycles.
Most companies underestimate what they can claim. Our study covers every qualifying role, every component, and every year still open for amendment.
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