Many companies take advantage of tax savings across various industries, including Architecture & Engineering (A&E). Two tax savings that A&E companies can qualify for are the research and development (R&D) tax credit and the 179D tax deduction.
The R&D tax credit provides dollar-for-dollar cash savings each year for companies performing activities related to developing new or improved products and processes. Each year, this lucrative credit yields billions of dollars in federal and state benefits to companies engaged in qualified research.
Companies in the A&E industry can yield R&D tax credits from their work in designing and developing their products. Some qualifying activities include: achieving a Leadership in Energy and Environmental Design (LEED) certification, evaluating design alternatives, and developing preliminary designs and development plans. Individuals in these R&D qualifying roles include civil engineers, construction managers, designers, drafters, engineers, project managers, and project architects.
Case Study:
A developer of A&E products and process has an annual revenue of $15 million. Their qualified activities resulted in $400,000 in federal and state R&D tax credits.
Architecture firms may also qualify for the 179D tax deduction. This financial incentive is geared towards architects and engineers of government buildings.
Case Study:
A 100,000 square foot government-owned building with a 2020 completion date is eligible for a maximum 179D deduction of $180,000.
KBKG has experts that can assist with the R&D tax credit and 179L tax deduction. Contact us to see if you qualify.
» Learn more about the R&D tax credit
» Learn more about the 179D tax deduction