R&D Tax Credit for Engineering Firms
Engineering firms often do not realize that they are eligible for the R&D tax credit. The Research tax credit allows companies to realize tax savings, increase cash flow and stay competitive in the marketplace. Many of the qualifying activities are considered day-to-day operations for the construction industry. Engineering firms with a design-build team and engineers on staff will likely qualify for this incentive.
The benefits can be significant and are efficient to realize through our services. The R&D tax credit can provide a hidden but immediate source of cash for construction firms from prior years, plus a significant reduction to current and future years’ federal and state tax liabilities.
To qualify for the Research and Development Tax Credit, you will need to meet three cost components:
- Expense of direct wages;
- Expense of supplies consumed; and
- Cost of contract research.
Typical Qualifying Research Tax Credit Activities:
- BIM Modeling – Designing a building collaboratively with one system of computer models
- Determining alternative structural design
- Improving or determining substitute heating and air conditioning systems
- Improving or developing substitute ventilation
- Developing or improving lighting
- Sustainable design
- New technology
- Value engineering
- Development of substitute electricity conduction systems
- Space management to determine type and scale of facilities.
- Design performance testing
- Development of alternative water flow/plumbing systems
- Integrating transport systems into the design of a structure
- New material testing – measurement of the characteristics and behavior of such substances
- Environmental design
- Environmental impact studies
- Incorporating waste disposal processes into the structure
Our Research & Development Tax Credit practice consists of engineers, CPAs, and attorneys who have extensive experience conducting R&D Tax Credit Studies at both the federal and state level. Our process begins with a free assessment to ensure that the company qualifies for the credit and would be able to utilize them. Each of our studies includes a site visit to help facilitate the study process. We also include audit support with all of our studies. This is a conservative federal and state incentive that was just made permanent by Congress as part of the 2015 PATH Act. Contact ETS for more information at 800-236-6519 or email here.