Marine engineering is one of the most R&D-rich sectors in manufacturing. Whether you’re improving propulsion systems, redesigning hulls, testing hydrodynamics, developing new materials, or integrating advanced marine electronics, you are almost certainly performing qualified research.
This blog explains why marine engineering qualifies for the R&D tax credit, what activities count, and how manufacturers, designers, and engineering firms can secure meaningful tax benefits for the innovation they’re already doing.
Marine engineering requires constant problem-solving:
Each of these engineering challenges involves technical uncertainty, testing, and experimentation, which are the core requirements for the R&D tax credit.
If your engineering team is asking, “How do we make this faster, safer, more efficient, or more reliable?” then you’re performing R&D.
To qualify for the R&D tax credit, work must meet all four parts of the IRS Four-Part Test:
The goal is to improve performance, function, reliability, or quality.
Marine engineering hits this constantly: hydrodynamics, propulsion, durability, safety, electronics.
You don’t know the outcome at the start—materials, geometry, algorithms, or propulsion configurations are unknowns.
Testing, modeling, prototyping, sea trials, CFD analysis, iteration—this defines marine engineering.
Marine engineering relies on physics, mechanical engineering, fluid dynamics, computer science, and materials science.
Because the sector naturally satisfies these criteria, most marine engineering companies qualify for significant credits.
Below are the most common—and most valuable—R&D categories within marine engineering.
Whether you're working on internal combustion, electric, hybrid, or alternative-fuel propulsion, propulsion design is inherently experimental.
Reworking propulsion parameters requires technical iteration and experimentation, making it textbook R&D.
Hydrodynamic optimization is one of the most R&D-intensive parts of marine engineering.
Any work to reduce drag, improve handling, increase range, or optimize buoyancy qualifies.
Marine environments are unforgiving—salt, weather, corrosion, and vibration all require engineering innovations.
If your team tests materials, compares options, or redesigns structural components, that’s qualifying R&D.
Marine electronics have become highly sophisticated over the past decade.
Software and electronics alone often generate massive qualified research expenses, especially when integrated with propulsion or navigation.
Environmental compliance is a major driver of R&D.
Marine companies experimenting with low-impact or sustainable innovations often qualify.
Examples include:
These activities require prototyping and iteration—key R&D elements.
The IRS heavily favors hands-on engineering work that involves testing and refinement.
Failure is not just acceptable—it’s qualifying.
The credit is designed to reward the trial-and-error nature of innovation.
As the marine industry moves toward electric propulsion, engineering teams face major technical uncertainty.
R&D here often includes:
Nearly every aspect of electrification qualifies for R&D incentives.
R&D credits apply to far more companies than most realize.
If a company improves how something floats, moves, steers, charges, senses, or communicates, R&D credits are available.
The most valuable categories include:
For employees involved in R&D:
Materials used in prototyping or testing:
Work performed by:
CFD, simulation, modeling, and software tools used for R&D qualify as well.
These costs often add up to significant credits for marine manufacturers.
Many marine engineering companies don’t realize they qualify because they assume:
Marine engineering is full of the iteration and experimentation the IRS wants to reward.
Simple documentation goes a long way.
Encourage teams to save:
B10 Capital helps recreate and validate this documentation even when teams didn’t track everything from the start.
Marine innovation is deeply technical.
Most CPAs simply cannot translate marine engineering into IRS-qualified research.
B10 Capital does.
Our team specializes in:
The result is a credit that is optimized, clean, and defensible.
Marine engineering is one of the most innovative sectors in manufacturing today.
If your company is working on propulsion, hull design, hydrodynamics, electronics, materials, or sustainability—you are almost certainly doing R&D.
The R&D tax credit rewards exactly this type of technical problem-solving.
If your marine engineering team is improving performance, efficiency, safety, or sustainability, you’re likely leaving valuable credits unclaimed.
Contact B10 Capital today to evaluate your qualifying activities and secure your R&D tax benefits.
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