Manufacturing - Specialty Tax Advisors

The Manufacturing sector involves high capital investment, innovation and R&D, energy efficiency and sustainability goals, and technological modernization, all areas that are candidates for tax incentives.

Ideal Candidates:

Manufacturers of industrial, consumer, or technology products
Exporters of US-made goods
Companies investing in automation, robotics, or facility upgrades
Renewable energy equipment manufacturers
Family-owned or private equity-backed manufacturing firms

Here’s an overview of how Manufacturing companies can benefit.

Research & Development (R&D) Tax Credit

Manufacturers frequently qualify for R&D tax credits through:

Product design, prototyping, and testing
Process improvements on the production floor
Automation, robotics, and quality control systems
Tooling, fixtures, and custom machinery development

Benefit: Up to 10% of qualified R&D expenses (including wages, materials, and subcontractors), with immediate cash benefits and payroll tax offsets for eligible small businesses.

Cost Segregation

For companies that own or improve production plants, manufacturing facilities, warehouses, or distribution centers:

Reclassifies assets like electrical systems, ventilation, production-specific flooring, site improvements, and lighting
Shortens depreciation from 39 years to 5, 7, or 15 years

Benefit: Creates large first-year depreciation deductions, improving cash flow and reducing taxable income.

179D Tax Deduction

Manufacturers upgrading or building energy-efficient facilities may qualify:

Deductions up to $5.00 per square foot for improvements to HVAC, lighting, and building envelope
Can also apply to warehouses, office spaces, and mixed-use facilities

Benefit: Immediate deductions for sustainability-driven upgrades.

What Services are Included?

Section 45X – Advanced Manufacturing Production Credit

For US-based manufacturers of:

Renewable energy components (solar, wind, battery storage, inverters)
Critical minerals processing

Benefit: A per-unit production tax credit—designed to boost domestic clean energy manufacturing.

IC-DISC (Interest Charge – Domestic International Sales Corporation)

Export Tax Incentive for manufacturers exporting goods made in the US:

Enables profits to be taxed at qualified dividend rates (up to 20%) instead of ordinary income rates (up to 37%)

Benefit: 10–20% permanent tax savings on qualified export profits.

Section 263A (Uniform Capitalization Rules) & Fixed Asset Reviews

Manufacturers often overcapitalize costs related to:

Inventory production
Facility improvements
Equipment and tooling

A fixed asset review can uncover assets eligible for expensing or write-offs, unlocking missed deductions.

Benefit: IRS-compliant catch-up deductions through a §481(a) adjustment.

State & Local Incentives

Manufacturers may qualify for:

Job creation and investment tax credits
Property tax abatements for facility expansions
Utility rebates for energy efficiency improvements

Benefit: Layered incentives that further enhance ROI.

Form 3115

A Form 3115 - Application for Change in Accounting Method, allows businesses to request approval from the IRS to change their accounting method. This form might be required when making changes to claim various tax credits.

Changing Depreciation Method
Inventory Method
Accounting for Repairs vs. Capital Improvements

Benefit: Tax relief through audit protection, improved financial reporting accuracy, potential tax benefits, and compliance with IRS Regulations.

Payroll Tax Reduction Strategy

Companies with W2 employees will qualify for this tax credit program.

Proven ROI with significant Payroll Tax savings recognized on first payroll cycle
Eligible employees see an increase in net take-home pay
Zero upfront or out-of-pocket cost to employer or employee
Attract and retain top talent
Audit compliance

Benefits: Employer FICA Tax Savings is $56.80 per month or $681.60 per year per eligible employee. Employee FICA/State/Federal Tax Savings includes an approximate 3-4% increase in monthly net take-home pay.