Federal R&D tax credit · engineering firms
Technical work you already do may qualify for the federal R&D tax credit.
Many engineering firms perform technical work that may qualify — often as part of projects they already consider ordinary client work. The key is not whether a project is called “research.” It is whether the underlying activities satisfy the federal R&D tax credit requirements.
CPA-led, technically defensible, documentation-focused, R&D opportunity assessment
Does your work pass this four-part test?
A useful way to determine whether an engineering project deserves a closer R&D tax credit review is to ask four questions:
- 1
Were you developing or improving a design, product, process, technique, or similar business component?
- 2
Did the work rely on engineering, physical science, computer science, or another qualifying hard science?
- 3
At the outset, was there technical uncertainty about capability, methodology, or the appropriate design?
- 4
Did your team evaluate alternatives through modeling, calculations, testing, simulation, prototyping, design iterations, or another process of experimentation?
If the answer is “yes” to all four, the project may warrant further analysis.
What can count
Qualifying activities can include
- Evaluating alternative designs
- Engineering calculations and modeling
- Testing design concepts
- Resolving technical uncertainty
- Developing or improving engineering processes
Potential qualified research expenses can include
- Eligible W-2 wages
- Supplies used in qualified research
- Generally 65% of qualifying contract research costs, subject to the applicable federal rules
The potential benefit can be significant enough that engineering firms with substantial technical payroll should consider screening their projects rather than assuming their work does not qualify.
How we work
Our approach at Heritage Advisors CPA LLC is straightforward:
- Step 1
Qualify
the activities
- Step 2
Identify
eligible costs
- Step 3
Calculate
the potential credit
- Step 4
Evaluate
documentation and defensibility
If the analysis doesn’t support a credit, we say so.
Heritage Advisors CPA LLC helps businesses identify potentially qualifying activities, quantify eligible costs, and develop the documentation needed to support the credit. We can take one completed project and perform an initial eligibility screen at no cost. No tax return or extensive documentation is needed for the initial conversation.
Send us one recent project
Tell us about one completed project in a sentence or two. We’ll review it and arrange a short call.
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