If you’re a CPA advising business clients, you likely know which industries (like software and technology) clearly qualify for the R&D tax credit. But what about the not-so-obvious industries? The ones quietly innovating behind the scenes—without lab coats or patent filings.
These businesses may not look like traditional “research and development” outfits, but their operations often meet the IRS’s definition of qualified R&D activity. And if you’re not having that conversation with them, they could be missing out on thousands in tax credits—and you might be missing an opportunity to deliver added value.
At Firestone Tax, we specialize in identifying R&D eligibility in industries that often go unnoticed. Below, we’ve highlighted three sectors where we consistently find opportunity—along with what you, as their trusted CPA, should be looking for.
Manufacturing: Hidden Innovation on the Shop Floor
It’s easy to assume manufacturing R&D only applies to large-scale, high-tech operations. But in reality, some of the strongest credit opportunities exist within small and mid-sized manufacturers—especially those constantly improving products or refining their processes.
Clients may qualify if they are:
Developing or improving manufacturing methods
Designing or prototyping custom parts, tools, or fixtures
Experimenting with materials or tolerances
Reducing scrap or increasing throughput
Integrating automation or advanced equipment
These activities often happen under pressure: a client request, a supply chain shift, or a push for greater efficiency. But behind the scenes, they involve experimentation, iteration, and uncertainty—hallmarks of qualified R&D work. If a manufacturer has engineers, technicians, or process specialists solving problems week-to-week, it’s worth taking a second look.
Food & Beverage: Beyond the Recipe
The food and beverage industry is an ever evolving landscape—driven by shifting consumer trends, regulatory pressure, and technical complexity. Many CPAs overlook these businesses for R&D, but this is a rapidly expanding category for credit qualification.
Key indicators of eligibility:
Developing new or improved recipes and formulations
Scaling up production from test kitchens to full runs
Creating allergen-free, keto, vegan, or gluten-free variations
Extending shelf life or nutritional profile
Engineering new packaging or delivery systems
Even efforts that don’t result in a successful launch can qualify—as long as there’s technical uncertainty and a process of experimentation. Be sure to ask your clients about product launches that “took a few tries to get right.” The trial-and-error phase is often where the credit lives.
Financial Services: The Underrated Tech Players
Most CPAs don’t associate banks, lenders, or insurance firms with R&D—but in today’s competitive environment, financial companies are investing heavily in technology. That often means custom development, workflow automation, and internal innovation—all of which can be credit-eligible.
Look for these activities:
Developing proprietary financial software or mobile apps
Automating internal workflows (loan origination, underwriting, claims)
Building custom dashboards, reporting tools, or integrations
Enhancing cybersecurity or secure data handling
Designing client-facing platforms or account portals
While these efforts may be led by a technology team, they often sit under “operations,” “compliance,” or “IT”—and get missed in a typical tax planning discussion. If your financial services client employs developers or customizes tech for their use, there’s a strong chance they have qualified expenses.
A Quick Reminder on What Qualifies
The federal R&D tax credit typically applies to:
Wages for employees engaged in qualifying activities
Supplies and materials consumed in the process
Cloud computing expenses (used for development/testing environments)
Contractor fees (as long as the company retains ownership of the work)
The credit can be worth 5–10% of qualified expenses federally, plus potential state credits. It’s dollar-for-dollar—and often retroactive for open tax years.
Why This Matters for CPAs
You don’t need to be an R&D expert to open the conversation—you just need to know where to look. Identifying one or two qualifying clients each year could mean thousands in value to them—and greater trust in your advisory services.
At Firestone Tax, we act as your partner. We don’t compete with you. We bring deep R&D expertise, IRS-aligned documentation, and a white-glove experience that makes you look like the hero.
Let’s Help Your Clients Uncover What They’ve Earned
We offer a free R&D credit consultation to assess a client’s eligibility for the R&D tax credit.
Call us: 208.416.1039 | Email: rance.hughes@firestonetax.com | Visit: firestonetax.com