Is my business eligible?
The research and development (R&D) tax credit is a general business tax credit for companies that are incurring R&D expenses in the United States.
Examples of qualifying activities for architectural, construction, and engineering firms include:
- Design, build, and design-assist projects including RFPs and proposal bids
- Engineering activities including concept and value engineering
- Improvements to a building’s ability to withstand seismic events or extreme weather
- Exploring innovations such as “green building” and sustainable designs
- Technical improvements to a building's heat, light, and power efficiency
- Development of unique facilities such as stadiums, dams, bridges, and tunnels
Qualifying research expenditures are:
- Wages — wages of individuals performing, supervising, or assisting R&D functions
- Supplies — cost of materials consumed in the development of new products, models, prototypes, first articles, or pilot designs
- Contract research — payments to outside consultants for engineering and design services, R&D function support, or outside testing
Activities that do not qualify as research expenditures include:
- Aesthetic or related to style, taste, cosmetic, or seasonal design factors R&D after commercial production
- Adaptation or duplication of existing components
- Efficiency or marketing surveys, routine data collection, or studies
- Foreign research
- Research that is funded (it lacks risk of economic loss) or when the taxpayer does not retain significant rights to the research
Companies can benefit in several ways:
- Gain immediate tax refunds from current and previously filed returns, potentially with interest
- Reduce your current-year estimated tax payments
- Decrease your current-year effective tax rate and income taxes
Example:
| Federal R&D Tax Credit Calculation – C Corporation | Benefit |
|---|---|
| Qualified Expenses | $280,000 |
| Less: Base Amount (assume 50% of the R&D spend) | $140,000 |
| Eligible R&D Spend | $140,000 |
| Gross R&D Tax Credit Rate | 20% |
| Federal R&D Tax Credit | $28,000 |
R&D tax credit services for the construction, engineering, and architecture industries
Our team will identify the types of activities you engage in that qualify for the research credit, determine the best method for capturing and sustaining the results, and help you develop the proper documentation to substantiate the credit.
Phase 1 — Feasibility
For each period the research credits are available, we estimate your potential qualifying R&D expenditures by identifying research projects, wage costs, and other research-related expenses. This allows us to gain a detailed understanding of your company and tailor the study to your specific circumstances.
Phase 2 — The study
During the study phase, the consulting team will:
- Identify and document your research activities in detail
- Gather records for your qualified research expenditures such as wages and supplies
- Calculate your federal and state research credits
Phase 3 — Final report
Our findings are presented in a comprehensive report with calculations and the necessary documentation to support your research credits. We will complete the appropriate federal and state research credit tax forms and can amend previously filed tax returns.
You may qualify for a tax credit if you are designing new products or processes, or improving existing ones. Our R&D video shows you how.