News Analysis

Reduce Your Audit Risk with the R&D Tax Credit: Five Tips

The federal R&D credit looks like low-hanging fruit, but there might be a worm in the apple. Experts share lower-risk ways for AEC firms to file.

April 17, 2015

When was the last time you had to test out several design options to find out which one worked? Maybe just this morning. What would it be like if the federal government paid you for that?

Most design and construction professionals develop unique, innovative solutions for almost every building project. But depending on the contract, the client may not compensate you for the time you spend evaluating different solutions. The federal R&D tax credit—Section 41(d) Credit for Increasing Research Activities—can help firms recoup some of those costs. If claimed successfully, the credit allows every dollar spent on certain research activities to be subtracted directly from your federal tax bill. The dollars can add up quickly.