Packaging manufacturers — companies that produce containers, films, boxes, pouches, or other packaging products — may perform activities that warrant analysis under the federal R&D tax credit. This page explains what development work may be relevant. It is educational and is not individualized advice. For the foundational framework, see our page on qualified research.
What R&D May Look Like in Packaging Manufacturing
Packaging manufacturing involves material development, structural design, barrier performance, sustainability, and production-process optimization. Work directed at resolving genuine technical uncertainty in these areas may warrant review.
Industry-Specific Examples of Technical Development
- Developing packaging materials or structures to meet a barrier, strength, or performance target where the appropriate design is uncertain.
- Testing alternative materials — bio-based, recycled, lightweight — to meet a performance or sustainability target where the capability is uncertain.
- Developing structural designs to achieve a protection or material-reduction target where the appropriate design is uncertain.
- Developing production processes to improve throughput or reduce defects where the method is not established.
- Developing barrier coatings or treatments to meet a specified shelf-life or protection target where the appropriate approach is uncertain.
- Testing alternative closure or sealing systems to meet a performance or convenience target where the capability is uncertain.
Technical Uncertainty Examples
- Whether an alternative material can achieve a specified barrier target while maintaining mechanical performance.
- Whether a modified structural design can achieve a protection target with reduced material.
- Whether a new production process can reduce defects to a target level at production volume.
Process-of-Experimentation Examples
A process of experimentation may involve producing test packages with alternative materials or designs and conducting performance testing, testing alternative barrier coatings and measuring properties, or running production trials at alternative configurations and measuring defects and throughput.
Potential Business Components
Potential business components may include a new or improved packaging product, a new or improved material or structure, a new or improved barrier coating or treatment, a new or improved closure or sealing system, or a new or improved production process.
Employee and Contractor Work
Employees whose work may warrant analysis include packaging and structural engineers, materials engineers, process engineers, and quality engineers. Contractor work may include outside testing laboratories or material suppliers performing development work on behalf of the manufacturer.
Activities That Generally Require Caution or May Not Qualify
- Routine packaging production to known specifications.
- Ordinary quality control or inspection.
- Cosmetic changes to graphics or appearance without a technical performance target.
- Simple size or configuration changes using established designs.
- Ordinary troubleshooting without an identified uncertainty and evaluative process.
Documentation That May Help
Records that may help include structural design drawings, material and barrier test results, production trial data, and records connecting personnel and materials to specific development projects.
Example Hypothetical Project
The following is a hypothetical example for illustration only.
A packaging manufacturer is developing a recycled-content barrier package intended to meet the same shelf-life target as a virgin-material package. The technical uncertainty is whether an alternative combination of recycled content, barrier coating, and structural design can achieve the specified barrier and strength target. The team produces test packages with alternative approaches, conducts barrier and strength testing, and evaluates the results. Professional review is still needed.
Questions to Ask Internally
- What specific package, material, or process was being developed or improved?
- What technical uncertainty existed at the outset?
- How does this differ from routine production or cosmetic changes?
Relationship to the Four-Part Test
The four-part test applies the same way as in any industry. The work must satisfy all four elements: permitted purpose, technological in nature, elimination of uncertainty, and process of experimentation.
Key Takeaway
Packaging manufacturers may perform activities that warrant analysis under IRC §41 — particularly work involving materials, structural design, barrier performance, and production processes. Routine packaging production does not automatically qualify. Because these determinations are fact-specific, professional review is appropriate. For related industries, see plastics manufacturing and food manufacturing.