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S P O N S O R
Research and development
E very day, architecture and engineering companies create innovative designs to delight their clients and respond to the every-changing regulatory and efficiency requirements. Being agile and innovative keeps these companies at the forefront of their industry and creates repeat clients. Just by doing what comes naturally for cutting-edge AEC firms, they are likely eligible for a refundable tax credit.
Jessica Creevy
the activities, and must retain the intellectual property rights to the research. As an initial inquiry, activities claimed as part of the credit calculation must qualify as research. The code defines research as a four-part test, specifically: “Capturing your R&D expenses takes know-how and compiling substantiating documentation. It can provide cash and permanent tax savings to your company.”
Just by doing what comes naturally to these cutting-edge companies, they are likely eligible for a refundable tax credit. The R&D tax credit is calculated based on the expenses spent to perform the development and research necessary to create their designs. The credit is activity based, not success based, meaning the research can be unsuccessful and the taxpayer may still claim the credit. The expenses are typically employee wages or contractor costs, and are compared to prior years’ R&D expenses. The credit is roughly the increased spending year over year. Of course, the tax code, regulations, and court cases interpreting the statutes explain the requirements to claim the credit. The activities must qualify as research, the taxpayer claiming the credit must pay for the performance of
See JESSICA CREEVY, page 10
THE ZWEIG LETTER October 28, 2019, ISSUE 1318
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