By Michael Warady, CFP | Chief Revenue Officer, Tri-Merit July 14, 2026
What if I told you that one of the biggest opportunities to improve profitability isn’t found in increasing sales, cutting expenses, or raising prices?
It’s already sitting in the tax code.
Every year, billions of dollars in federal, state, and local tax credits and incentives go unclaimed by businesses that simply don’t know they exist. Businesses often assume incentives are only available for large corporations, technology companies, or massive renewable energy projects. The reality is far different.
Many companies are unknowingly leaving substantial cash on the table.
A surprising number of business owners I’ve spoken with over the years have the same reaction when we identify a credit opportunity:
“I wish someone had told me about this years ago.”
The problem isn’t a lack of incentives.
The problem is awareness.
Tax credits provide a dollar-for-dollar reduction in taxes owed, making them one of the most powerful financial tools available to businesses. Unlike deductions, which simply reduce taxable income, credits directly reduce a company’s tax liability.
The Most Commonly Missed Opportunities
Many business leaders are familiar with the Research & Development Tax Credit, but few realize how broad the definition of qualifying activities can be. Manufacturing process improvements, software development, automation initiatives, product enhancements, engineering efforts, and technical problem-solving may all qualify.
Beyond R&D, businesses may be eligible for incentives related to:
- Hiring and workforce development
- Energy efficiency improvements
- Clean energy investments
- Advanced manufacturing
- Cost segregation and real estate improvements
- Hiring targeted employee groups
- Location-based economic development zones
- Training and apprenticeship programs
The IRS itself maintains a substantial list of business tax credits available across multiple industries.
And that’s just at the federal level.
Many states offer their own incentive programs designed to attract investment, create jobs, encourage innovation, and strengthen local economies. Illinois alone continues to expand business incentive programs focused on manufacturing, workforce development, and economic growth.
Why So Many Businesses Miss Out
There are three reasons.
1. They Don’t Know What They Don’t Know
Most business owners are busy running their companies. They’re focused on customers, employees, production schedules, cash flow, and growth. Few have the time to stay current on hundreds of evolving incentive programs.
2. Credits Often Don’t Look Like “Tax Credits”
Many incentives are embedded in operational decisions.
Installing equipment.
Hiring employees.
Expanding a facility.
Developing software.
Making energy improvements.
Conducting engineering work.
These activities are usually viewed as business operations—not tax opportunities.
3. Eligibility Is Much Broader Than Most People Think
Many executives disqualify themselves before ever exploring whether they qualify.
They assume:
“We’re not a technology company.” “We’re not doing R&D.” “We’re too small.” “We don’t manufacture anything.”
In many cases, they’re wrong.
I’ve seen manufacturers, distributors, construction companies, food processors, engineering firms, software companies, and professional service organizations uncover significant incentives they never knew existed.
A Shift in Mindset
The most successful companies don’t wait until tax season to think about incentives.
They incorporate incentive planning into strategic decision-making.
Before a capital project.
Before a facility expansion.
Before implementing new technology.
Before launching an innovation initiative.
Before making large hiring investments.
They ask a simple question:
“What incentives might be available before we make this investment?”
That shift in thinking can dramatically change project economics, improve cash flow, accelerate ROI, and create capital for future growth.
The Bottom Line
The government creates tax credits and incentives for a reason.
They are designed to encourage investment, innovation, job creation, energy efficiency, domestic manufacturing, and economic growth. Businesses that align with those objectives should understand what benefits are available to them.
The unfortunate reality is that many businesses spend years qualifying for incentives they never claim.
The fortunate reality is that once awareness exists, that can change quickly.
The next time your company invests in people, technology, facilities, equipment, energy projects, or innovation, don’t just ask what it will cost.
Ask what incentives could help pay for it.
You may be surprised by what you find.
Michael Warady, CFP is Chief Revenue Officer at Tri-Merit, a specialty tax consulting firm that helps businesses and their CPAs identify and document R&D credits, cost segregation, and energy incentives. If you’re wondering whether something you’re already doing qualifies, that’s usually a good conversation to have.
