Fewer than 3 in 10 businesses that qualify actually claim the R&D tax credit (U.S. Chamber of Commerce).

Most miss out because of confusion about eligibility and the perceived complexity of filing.

R&D doesn’t only happen in research labs. In manufacturing, it happens on the production floor when engineers and operators test new methods, materials, and designs to make things work better.

If your team is refining processes, developing prototypes, or creating new tooling, you may already be performing Qualified Research Activities (QRAs) under the IRS definition.

At SPRX, we help manufacturers understand which activities qualify for the R&D tax credit and why. Read this guide to get a clear understanding of the qualified research activities (QRAs) that could apply to your work.

Types of Manufacturing Companies that Qualify

• Aerospace and Defense

• Automotive

• Chemicals

• Contract Manufacturing

• Cosmetics

• Dental Labs

• Electronics

• Food and Beverage Processing

• Footwear

• Machine Shop

• Metal Stamping

• Plastics Injection Molding

• Precision Manufacturing

• Semiconductor Chip Manufacturing

• Ship Building

• Sheet Metal Fabrication

• Steel Fabrication

• Textiles

• Tool and Die Shops

• Renewable Energy

• Furniture Manufacturing

• Toys and Recreational Equipment

What Counts as Qualified Research Activities in Manufacturing

If employees at your company engage in any of these activities, it’s R&D!

Product and Process Development

• Designing or testing new production equipment or manufacturing processes

• Developing prototypes, first articles, or samples for new or improved products

• Using computer-aided design (CAD) tools for product development and modeling

• Experimenting with machining methods or production trends to improve precision and efficiency

Tooling, Equipment, and Materials Innovation

• Designing or improving tools, dies, molds, and fixtures

• Developing innovative or second-generation equipment and automation systems

• Creating unique CNC programs or programmable logic controllers (PLCs)

• Developing custom alloys, materials, or manufacturing processes

Testing and Validation

• Performing stress analysis, performance testing, or quality assurance activities

• Refining production methods to improve yield, consistency, or cost efficiency

• Building and validating three-dimensional solid models or digital twins

Each of these activities aligns with the IRS Four-Part Test for Qualified Research.

The IRS Four-Part Test

Each of these activities meets the IRS four-part test (Section 174) for Qualified Research:

• Purpose: Improving a product, process, or method

• Technology: Grounded in agricultural or engineering principles

• Uncertainty: Testing to find what performs best

• Experimentation: Measuring, comparing, and refining results

Why This Manufacturing Work Qualifies as R&D

Every production improvement is a structured experiment.
When you develop new tooling, optimize line efficiency, or test material alternatives, you’re applying scientific principles to solve technical challenges. That is exactly what the IRS defines as research and development.

SPRX identifies and organizes these activities so your credit claims are precise, supported, and defensible.

The Takeaway for Manufacturing Companies

Architecture and engineering firms innovate every day. The challenge isn’t doing the work—it’s proving it.

SPRX helps you bridge that gap. We turn creative problem-solving into measurable, defensible results, so your firm gets the credit it deserves for the innovation it delivers.

Get in touch if you want help claiming your R&D credit.

Learn more about the R&D Credit

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