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Architecture R&D Tax Credits

Research & Development Tax Credit for the Architectural and Engineering Industry

Architecture and engineering (A&E) projects attract bids from foreign companies that compete by leveraging their own government assistance and incentive programs, directly diluting the United States’ competitive position. The U.S. federal and state governments recognize that the country’s tax policies can have a powerful influence on business investment decisions. As a result, the updated research and development tax policy expands the definition of qualification to launch technology, employment opportunities, and the country’s competitive edge, both in the A&E vertical as well as across multiple other industries.

A&E Businesses are on the Frontlines of Innovation

Architecture and engineering firms play a pivotal role in U.S. innovation, continuously creating new and improved designs, concepts & processes. However, as in any industry, the expense to drive design and develop new practices and products can prove cost prohibitive, particularly for small to midsized businesses. To minimize economic output while accelerating research and development initiatives, the federal and state governments incentivize A&E companies with R&D tax credits.

Companies Don’t Have To Revolutionize The Industry To Qualify For R&D Tax Credits

Most A&E firms aren’t pioneering new designs. However, under current tax law guidelines, the qualification parameters have been expanded beyond revolutionary designs to include a wide range of eligible activities.

Qualified Activities May Include:
  • Innovative or unique designs for various structures
  • Experimenting with the use of new or alternative materials
  • Computer-aided design (CAD) and computer-aided engineering (CAE) activities
  • The design and development of innovative or unique new LEED, energy-efficient, or “green” alternatives
  • Assessing design through various forms of modeling and computational analysis

Benefit Breakdown

Qualifying R&D activities can help your architecture and engineering firm monetize eligible operations to increase cash flow and bottom line profits.

Let’s say you spent the following costs in your development:

Design Payroll Costs:  $500,000

Your Federal R&D tax credit would be: $39,500

The research and development tax credit also allows taxpayers to go back and amend filings for up to 3 open years. Additionally, most states also offer this incentive, helping some organizations double their benefit.

Acena, a specialist in the R&D law, bridges the gap between the qualified activities and the associated costs.

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R&D Tax Credit in Action

Client Testimonial

"Randy and Tiffany were great. They helped us explore and understand how the R&D credit could apply to our industry. They were both very thoughtful and thorough."

-Controller, Architectural Firm

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