Neil Shah

Although globalization has been making manufacturing ever more difficult for U.S. companies, the federal government recognized the value of this sector in the 1980s, and it is rediscovering manufacturing’s importance again in 2021. Tax incentives for innovation have been available for decades, and talk of reshoring has made its way to Washington, D.C.

The new year and the new White House administration certainly will bring changes in federal policy. Working from the tax environment of 2020 provides some insights as to what the manufacturers can expect in 2021. Here are four strategies.

Many manufacturers hustled to innovate when COVID-19 hit. Assessing challenges and embracing risks accelerated during this time. If at all possible, manufacturers should continue to maintain the momentum of innovation, preparing for a postpandemic world.

The Research and Development Tax Credit saves U.S. businesses $10 billion every year and has helped manufacturers and suppliers across the country, including many in the automotive industry supply chain, to reinvest in their businesses. Those companies who use innovative approaches to design, test, and produce likely qualify for government-provided tax incentives that can help their business take the next step toward success.