Food & Consumer Packaging R&D Tax Credits

The food packaging market in North America was estimated to be worth $92.29 billion in 2020. What’s more, it is expected to grow at a CAGR of 4.9% from 2020 to 2028. In such a competitive industry, packaging companies must rely on innovations to keep up with changes in customer tastes, advancements in flexible packaging technology, and environmental norms. But R&D activities are usually pretty expensive, which is why companies rely on the Food & Consumer Packaging R&D tax credit to help offset some of the costs.

This incentive can recoup as much as 22% of all your qualifying expenses. However, that number can be lower depending on where you conduct research operations.

Qualifying Costs and Activities

The Food & Consumer Packaging research and development tax credit can cover a portion of your qualifying expenses. For example, paying for cloud computing services, subcontractors, supplies, and raw materials can count as QREs. In addition, you can offset wages for certain positions such as C-suite, software developers, QA and QC personnel, process and manufacturing engineers, packaging engineers, packaging sustainability managers, and materials scientists.

Regarding qualifying activities, your company must be involved in these or similar operations:

• Changing food packaging to ensure adherence to FDA and EU rules;

• Introducing flexible packaging options to an existing or new product line;

• Researching different materials or repurposing current ones to increase shelf life;

• Creating software to speed up time-to-market, packaging, or production;

• Considering sustainable and eco-friendly packaging options;

• Increasing efficiency by using automation or robots;

• Applying barcoding solutions for tracking and end-user data access.

Applying for the R&D tax credit in the Food & Consumer Packaging industry can be a time-consuming and complex process. However, you can rely on us for help and pay after your claim gets approved. We can also compute your potential benefit free of charge.

FAQs

What kind of companies can apply?

Food and consumer packaging companies that conduct qualifying research activities.

What data do I need to calculate credit?

Claim period gross receipts.

What information do I need to provide?

General ledger expense detail, payroll records, project notes, project lists, emails, purchase orders, and other documents regarding QREs for the claiming period.

Is credit carryforward an option?

Yes, up to twenty years.