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A/E/C Firms And The R&D Credit

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Are you looking to be more competitive in an ever changing global economy? Are you being asked to develop and improve designs and processes to be more forward thinking? Are you finding the cost of this constant development and improvement is becoming more costly? Many Architectural, Engineering and Environmental Consulting (A/E/C) firms don’t realize it, but the complexity of modern structures often requires a great deal of innovation, design and development from the firm’s professionals which lead to activities of creating structural, mechanical, electrical, and unique functional and energy-efficient designs that may allow them to take advantage of significant research and development (R&D) tax incentives.  If an A/E/C firm expends time and effort in the design phase of projects and processes then they are in a great position to claim the R&D credit. A firm does not have to be operating a laboratory to qualify for R&D tax credits as defined by the Internal Revenue Code. The following are just a small sample of examples that can qualify for the R&D credit:

  • Improving acoustical qualities of structures
  • Developing alternative water flow/plumbing systems
  • Determining alternative structural design
  • Conducting environmental impact studies
  • Performing CAD modeling
  • Developing new bridge structures
  • Designing master plans
  • Developing planning and elevation drawings
  • Designing and developing building facades
  • Designing building systems
  • Designing site orientations
  • Designing a functional site plan to incorporate or overcome the site plan features

The federal R&D tax credit can be an impactful monetary incentive for many A/E/C firms. The professionals at Somerset CPA’s have been able to obtain millions of dollars in credits for their A/E/C clients.  If you would like to learn more about the R&D tax credit and if your firm is eligible for these credits, please contact Jason Bainter, CPA, CGMA at jbainter@somersetcpas.com.