ENGINEERING

The R&D Tax Credit for engineering companies

All types of engineering companies qualify for the R&D tax credit, including chemical, civil, electrical, geotechnical, mechanical, and structural engineering.

The R&D tax credit can be a significant source of capital for engineering companies, impacting their bottom line and enabling them to grow and be more competitive in the market.

How can the R&D tax credit be used?

There are various ways that the R&D tax credit can be utilized.

FEDERAL/STATE TAX LIABILITY

Reduce your federal and/or state tax liability in current years, and receive refunds for past years.

FICA PAYROLL TAX LIABILITY

Reduce your FICA payroll tax liability (up to $250,000 per year). Requirements:
- Less than five years old since formation.
- Less than $5 million in revenue per year (includes companies that are pre-revenue).

CARRY IT FORWARD

Unused tax credits can be carried forward for up to 20 years, whether or not your company has achieved profitability.

ALTERNATIVE MINIMUM TAX (AMT)

Apply the tax credits against Alternative Minimum Tax (AMT) beginning January 1, 2016.

Approved R&D activities

There are a wide variety of ‘R&D qualified’ activities that happen inside of an engineering company’s operation that can result in significant tax credits.

Developing/improving lighting within a structure.

Conducting environmental impact studies.

Developing water flow, plumbing, and/or electricity conduction systems.

Developing/improving ventilation, heating and/or cooling systems.

Credit-generating expenses

Your R&D tax credit is made up of Qualified Research Expenditures (QRE’s). These comes from a variety of sources, including wages, supplies and third-parties.

W2 wages of individuals performing, supervising, or assisting R&D activities

65% of payments to third-party consultants,
contractors, and/or companies

Supplies/materials used in qualified R&D activities

Partnership earnings and/or Schedule C profits

Credit-generating expenses

Your R&D tax credit is made up of Qualified Research Expenditures (QRE’s). These comes from a variety of sources, including wages, supplies and third-parties.

ENGINEERING

The R&D Tax Credit for engineering companies

How can the R&D tax credit be used?

FEDERAL/STATE TAX LIABILITY

FICA PAYROLL TAX LIABILITY

CARRY IT FORWARD

ALTERNATIVE MINIMUM TAX (AMT)

Approved R&D activities

Credit-generating expenses

Credit-generating expenses

Get in touch with our team.

480.948.1063

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