The Research and Development Tax Credit is a lucrative tax credit that is, unfortunately, left on the table by many businesses, including civil engineering firms.
The Study - A Surgical Approach to Identify R&D Credits
Recently, our team at Tax Credit Collective methodically prepared a Research and Development Tax Credit Study for a North Texas-based civil engineering firm. With a reach spanning hundreds of cities throughout the southern United States, the firm's portfolio includes institutional sites, land developments, medical sites, multi-family sites, offices/warehouses, single-family sites, retail/restaurants, and municipal sites.
During our partnership with the civil engineering firm, our team methodically reviewed select financial and project details to determine the firm's potential tax savings. During this review, our team's goal was to vet the client's Research and Development Tax Credit eligibility and to identify qualifying activities and processes to maximize the tax incentive to its full potential.
The Result - $97,000 Identified to Offset Tax Liability
Our surgical approach to identifying Research and Development Tax Credits allowed us to save the civil engineering firm a little over $97k to offset their tax liability by using qualified research expenses for the current tax year.
The identified Research and Development Tax Credits allowed the client to claim credits, putting dollars back into the hands of the civil engineering firm. These tax credits will enable them to continue their mission focused on improving the civil engineering space by producing high-quality projects while staying engaged with their clients every step of the way.
The R&D Credit - What Your Firm Might Be Missing Out On
This lucrative tax credit is available to any size business in any industry. According to Treasury data, 91% of qualifying companies with $250 million or more in annual revenue claim this lucrative credit each year, but...
Companies with less than $50 million in revenue that otherwise qualify only capitalize on the R&D Tax Credit 17% of the time.
What matters most is determining whether you have qualified activities and expenses that pass the four-part test from IRC § 41.
Permitted Purpose - Are you developing something of value?
Elimination of Uncertainty - How are you eliminating elements of doubt in the development process?
Process of Experimentation - What systematic evaluation of alternatives did you use?
Technological in Nature - Was your process of experimentation based on a hard science?
It's tricky to determine on your own whether or not you qualify. Many businesses mistakenly think they aren't eligible and miss out on six-figure tax credits. With over 20 years of experience, our team at Tax Credit Collective does the heavy lifting for our clients by using a 3 Phase method to identify and capture the R&D Tax Credit.
Want to find out if your civil engineering firm is leaving money on the table?
"If you own or run a business that develops products, I highly suggest connecting with Tax Credit Collective to help you find the money you have been leaving on the table for years."
Scott Engberg - VP
CHM Industries, Inc.