Tax Incentives for the Government Contractors Industry

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Government contractors operate in a highly regulated, competitive environment where managing project costs, compliance requirements, and long-term profitability is critical. From infrastructure development and engineering services to technology systems and facility construction, these organizations often make significant capital and operational investments that create opportunities for tax savings.

KBKG helps government contractors identify and maximize tax incentives related to Research and Development (R&D) Tax Credits, 179D Tax Deduction, Cost Segregation / Fixed Assets, Negotiated Incentives, and IC-DISC.

Our experienced team works to uncover available deductions and credits, improve cash flow, and ensure contractors fully leverage applicable federal and state tax incentives.

Government Contractors Industry Tax Saving Opportunities

Cost Segregation for Buildings & Improvements

Any building acquisition or/and improvements over $1.5M should be reviewed for proper classification of the individual components for tax depreciation.

Fixed Asset Review

Evaluating a company's entire fixed asset schedule to identify assets that can be optimized for federal and state tax purposes. Taxpayers utilizing the book method of accounting for tax are not maximizing their available deductions.

Research and Development (R&D) Tax Credit

Federal credit worth approximately 7% to 10% of qualified research expenditures related to designing, developing and improving processes, formulae, and software. State R&D tax credits may also be available, allowing eligible companies to maximize their tax benefits.

179D Incentive for Energy Efficient Buildings

Federal deduction worth up to $5.94/per square foot of energy efficient buildings. Available to architects, engineers, design/build contractors and building owners.

IC-DISC

The IC-DISC is a federal tax incentive that provides significant, permanent tax savings for U.S. companies that export.

Negotiated Incentives

KBKG helps businesses secure and maximize state and local incentive programs that reduce project costs and improve long-term return on investment.

Government Contractors Industry Tax Insights

Questions to Ask Before Hiring an R&D Tax Credit Provider

Selecting an R&D tax credit provider is a risk-management decision. A research tax credit claim may ultimately be reviewed by the IRS or a state…

KBKG Tax Insight: How to Allocate Land vs. Building Values for Investment Property

Follow KBKG on Social Media Linkedin Facebook X-twitter Youtube See If You Qualify Allocating an investment property’s purchase price between land and depreciable improvements directly affects the deductions available to the owner. Land cannot be depreciated, while buildings and qualifying site improvements may be depreciated over their applicable recovery periods. Purchase

179D After the Sunset: Why Designers Can Continue Claiming the Deduction for Years

Design firms should treat June 30, 2026, as a project-screening and documentation deadline. The construction-start date, placed-in-service year, and…

Tax Incentives for the Government Contractors Industry

Find out if you qualify

Government Contractors Industry Tax Saving Opportunities