Structural Engineering R&D Tax Credits

Maximize innovation in structural engineering. Structural engineering firms in the U.S. undertake research into new load‑bearing systems, seismic/ wind‑resistant designs, advanced materials, modular structural systems and complex geometry analysis. Many of these meet the criteria for the federal R&D Tax Credit under IRC §41, plus state‑level incentives may apply.

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Examples of qualifying activities in structural engineering

High‑Span & Long‑Span Systems Testing new structural framing systems, large‑span modules, lightweight/truss systems, or composite structural assemblies.
Seismic & Wind‑Resistant Structures Developing novel bracing systems, base isolation methods, tuned mass dampers, or hybrid structural solutions for extreme weather or seismic zones.
Modular & Prefabricated Structural Systems Experimenting with off‑site prefabricated structural modules, advanced connections, rapid erection systems, or reused structural systems.
Composite / Advanced Materials in Structural Systems Testing new fibre‑reinforced composites, high‑performance steel alloys, hybrid timber/steel systems, or structural adhesives.
Computational Structural Modelling & Monitoring Using advanced FEM/FEA modelling, structural health monitoring sensor networks, digital twin modelling of structural behaviour under load, real‑time monitoring prototypes.

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What qualifies as R&D in structural engineering?

To qualify, activities must:

Pursue a permitted purpose – a new or improved structural system, component, or methodology (e.g., high‑span frames, novel bracing, prefabricated structural modules)
Address technical uncertainty about how to design or build that system to achieve required performance, durability, constructability or cost objectives
Follow a process of experimentation – via modelling, simulation, mock‑ups, physical testing, structural monitoring, or prototype trials
Be technological in nature, grounded in structural engineering, materials science, dynamics, seismic/ wind engineering, computational modelling or system integration

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Qualified Research Expenses (QREs)

Expense Type

Examples in Structural Engineering

Eligibility Notes

Wages

Structural engineers, modelling/FEA specialists, test lab coordinators, monitoring‑network engineers

Must perform research/experiment tasks

Supplies

Prototype structural modules, composite panels, instrumentation sensors, load‐testing hardware, mock‐up elements

Must be used in the research process

Software / Cloud

FEA/structural simulation tools, digital‑twin platforms, sensor‑data analytics platforms, structural health‑monitoring software

Must support qualifying research tasks

Contract Research

External structural test labs, monitoring network installers, materials labs, simulation service providers

Portion of contract may be claimed

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Roles commonly involved

Structural system design leads developing new frames or modules
Simulation/modeling engineers specialising in FEM/FEA and dynamics
Field‑trial/test technicians executing structural load tests or monitoring systems
Materials/structural specialists working on composites/hybrid systems
Research labs: structural test houses, monitoring sensor integrators, materials development labs

What does not qualify

Routine structural designs using code‑based, well‑known methods without experimentation
Standard construction documentation or detailing when no new technical uncertainty is being resolved
Installation of standard structural systems without innovation or research
Purely aesthetic structural design without resolving engineering uncertainty

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Compliance and Documentation

§174 Update

Following the One Big Beautiful Bill Act (OBBBA) signed July 4, 2025, §174 now allows immediate expensing of domestic research expenses for tax years beginning on or after January 1, 2025. Taxpayers may also elect optional amortization under new §174A. Foreign research expenses must still be amortized over 15 years. This is separate from the §41 credit but impacts overall tax planning.

‍Structural engineering firms should:

Maintain narratives describing the technical uncertainty (e.g., “We developed a new composite truss system to reduce weight by 20% while maintaining load capacity”)
Archive simulation/FEA logs, prototype/test data, sensor monitoring logs, digital‑twin versions
Track employee time for research tasks vs routine structural design tasks
Retain contracts/scopes showing research risk and rights retention Thorough documentation supports the IRS four‑part test and strengthens audit‑readiness.

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Frequently Asked Questions

Do structural engineering firms qualify for the R&D Tax Credit?

Yes — when they develop new structural systems, use advanced materials, execute load‑testing/trial protocols, employ digital modelling or monitoring innovations, they may qualify.

What expenses can be claimed?

Wages of structural engineers and technicians engaged in experimentation, materials/instrumentation for prototypes/trials, simulation/modeling software, contract research with test labs.

Which activities qualify in structural engineering?

Examples: composite structural module testing, seismic/wind‑resistant system development, modular prefabricated structure innovation, structural health‑monitoring sensor networks, digital‑twin modelling.

Which activities do not qualify?

Standard structural design without innovation, detailing with known methods, construction of standard systems without experimental tasks, administrative or sampling tasks only.

How should firms document research?

Narratives explaining the technical uncertainty and experiment objective, simulation/model logs, test/prototype data, monitoring/sensor logs, time tracking of research employees, version control of prototypes.

How much can firms typically save?

Varies by innovation scope and project volume. Firms investing in multiple structural‑engineering research projects may capture significant credits; smaller research efforts still produce meaningful savings.