By selecting panel data of manufacturing enterprises listed on the Shanghai A-share market from 2018 to 2021 as samples for analysis and research, the impact of strengthened R&D expense deduction policies and increased R&D investment on the intelligent transformation and upgrading of manufacturing enterprises was empirically tested. The results show that the strengthening of the policy of adding and deducting R&D expenses has promoted an increase in R&D investment, thereby promoting the intelligent transformation of manufacturing enterprises. The strengthening of the policy of adding and deducting R&D expenses completely achieves the intelligent transformation of manufacturing industry through the increase of R&D investment, and R&D investment plays a complete intermediary role. Through further research, it is found that the preferential policy of deducting R&D expenses has a more significant incentive effect on equipment manufacturing enterprises and manufacturing enterprises in provincial and sub provincial cities, which further promotes their intelligent transformation and upgrading.