Architects and architecture firms invest substantial time, money, and resources to advance and improve building designs and processes. Many firms are unaware that expenses associated with the research and development (R&D) of novel or improved functional and/or energy-efficiencies can qualify for the R&D Tax Credit. Projects at first glance may seem routine, and therefore not qualify as R&D. However, the process inherent in designing a new structure according to client and code specifications often involves qualifying activities that can translate into substantial tax savings.
Employee wages, raw materials and supplies, and third-party contractor costs associated with research and development activities are considered qualified research expenses (QREs). Companies can receive refunds of up to 22% of total QREs through federal and state tax credits, depending on the state in which your company or firm operates.
Examples of qualifying activities:
- Implementing new designs to improve space utilization
- Creating schematic, development, and construction documents
- Designing innovative green or sustainable functionality
- Developing elevation drawings
- Implementing unique energy-efficient features
- Using building information modeling (BIM) to aid decision-making for a new facility
Do you have these job titles on your payroll, or do you hire third-party contractors to do these jobs?
- Computer-aided Design (CAD) Engineers
- Design Directors
- Managing Principals
- Project Designers
- Project Managers
- Structural Engineers