Construction of buildings, housing, civil works, and utilities (highways, sewer and water supply systems, gas and electric systems, etc.) accounts for more than half of total domestic investment. Many construction firms do not realize that the creation or design of innovative construction techniques qualifies for significant tax savings through the Research and Development (R&D) Tax Credit. Firms that invest resources into creating new or improved construction processes can recoup a portion of these expenses, freeing up capital to reinvest in infrastructure, employees, or innovation.
Employee wages, raw materials and supplies, and third-party contractor costs associated with R&D 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 business operates.
Examples of qualifying activities:
- Developing new or improved methods in construction processes
- Creating new technology or software to aid in construction
- Evaluating new raw materials
- Implementing novel robotics or automation methods
- Assessing the optimal use of materials, equipment, and labor to maximize project efficiency
- Developing novel approaches to improve construction worker health and safety
Do you have these job titles on your payroll, or do you hire third-party contractors to do these jobs?
- Building Information Modeling (BIM) Engineers
- Electrical Engineers
- Mechanical Engineers
- Project Managers
- Site Managers
- Software Developers