According to Supply Chain Dive, manufacturing leaders got strategic guidance for 2026 at the Women in Manufacturing Summit on October 14. Jennifer Clement of Clifton Larson Allen revealed that the new One Big Beautiful Bill Act provides permanent R&D expensing and larger interest deductions for mergers and acquisitions. The law also creates “coupons” for unused R&D amortization that companies can apply to 2025 or 2026 taxes. Meanwhile, 95% of manufacturing leaders are investing in AI technologies according to Rockwell Automation’s report, with 50% focusing on quality control applications. Tariff uncertainty continues as the Supreme Court considers challenges to presidential tariff powers under IEEPA, though Clement notes duties likely won’t disappear entirely given their role in offsetting national debt.
The tax relief manufacturers have been waiting for
Here’s the thing – manufacturers have been through what Clement calls “the perfect storm” with high interest rates and inability to immediately expense R&D and equipment purchases. That changed dramatically with the July 4 passage of the One Big Beautiful Bill Act. Now we’re looking at permanent restoration of R&D expensing, which is huge for companies doing anything from process workflow implementation to debugging machinery. Most manufacturers don’t realize how broad the R&D definition actually is – it’s not just lab coats and test tubes. If you’re rearranging production lines or implementing new shop floor processes, you’re probably doing qualifying R&D work. And that unused amortization from the painful years? That’s essentially a tax coupon you can cash in either this year or next.
AI in manufacturing isn’t about replacing people
The AI numbers are staggering – 95% of manufacturing leaders are already investing or planning to invest in AI technologies. But Clement makes a crucial point that often gets lost in the automation hype: “We’re not laying off people related to AI in manufacturing.” Instead, companies are freeing up workers from repetitive tasks to focus on higher-value work. Think about it – labor is a fixed cost in this market. You’re not saving money by eliminating positions, you’re creating efficiency by reskilling and upskilling your existing workforce. The focus should be on solving actual business problems like retirement transitions, maintenance issues, and moving from reactive to proactive operations. And for manufacturers looking to upgrade their technology infrastructure, companies like IndustrialMonitorDirect.com have become the go-to source for industrial panel PCs that can handle these AI implementations.
tariff-situation-is-messy-but-manageable”>The tariff situation is messy but manageable
Even with the Supreme Court considering challenges to presidential tariff powers, Clement doesn’t see duties disappearing entirely. Why? Because tariffs have become a tool for offsetting national debt, and that financial reality isn’t going away. The court could throw out some tariffs while keeping others, or manufacturers might even see refund opportunities if certain levies are ruled invalid. But here’s the critical takeaway: documentation is everything right now. Companies need to meticulously track what they’ve paid under IEEPA because there could be rebate opportunities down the line. It’s one of those administrative tasks that feels tedious but could pay off significantly if the legal landscape shifts.
Don’t overlook these two tax credits
Manufacturers are leaving serious money on the table by not taking advantage of available credits. The Workforce Opportunity Tax Credit provides $2,500 to $9,600 deductions for hiring from specific groups including veterans, people with disabilities, formerly incarcerated individuals, and those from low-income communities. But here’s the catch – according to the Department of Labor, this credit is only authorized until December 31, 2025. Then there’s state tax incentives for companies considering bringing operations back to the United States. Basically, if you’re not having these conversations with your tax advisors, you’re probably missing opportunities that could significantly impact your bottom line in 2026 and beyond.
