Articles

June Technical Speaker 1

Kevin Sullivan, P.E. Bio

BRAYN Consulting

Tax Incentives for the Engineering Industry

The Research & Development (R&D) Tax Credit and other related tax breaks save U.S. businesses more than $12 billion annually. Many owners, officers, and CPAs of engineering firms are unaware that they are eligible for valuable federal and state R&D Tax Credits. However, due to the expansive definition of R&D for tax credit purposes, many of the day-to-day design and engineering activities performed by engineering firms qualify for such treatment.

There are four criteria that are considered when qualifying R&D activities. Each activity must meet this “four-part test” to include the associated taxable salaries and wages, supplies, and/or contract research in the calculation of the tax credit. Work performed under contract can qualify, but engineering firms should always be mindful of the exclusion related to funded research.  

This presentation will focus on the federal and Texas state R&D tax credits with specific application to engineering companies, and include case studies and examples.

 

 

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