CPA & Business Advisory Blog

The Research & Development Credit and the Construction Industry

Have you ever considered claiming the Research and Development (R&D) credit?  Have you always thought that the R&D credit doesn’t apply in the construction industry?  Well, think again.  The R&D credit is one of the government’s most underutilized credits available. Although companies are aware of it, many do not believe that it applies to their business.  There are many types of construction activities that will qualify as research and development activities under the Internal Revenue Code’s definition.  Following are just a few examples:

  • HVAC design
  • Electric system design
  • Design for LEED/green initiatives

Two new initiatives were recently introduced to Congress related to the R&D Credit: 

  1. The first initiative, the Startup Innovation Credit Act of 2012 is proposed to allow start-up companies to benefit from the R&D credit.  
  2. 2. The second initiative is to extend billions of dollars in tax incentives (including the R&D credit) to businesses and individuals. 

Many industries, including construction, can benefit from the credit.   The legislation is receiving bipartisan support and is expected to go through the Senate Finance Committee in the fall. 

Not sure if you qualify for the Research and Development Credit?  Contact our Cleveland and Akron Real Estate and Construction Accountants at 440-449-6800.




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