When it comes to engineering firms, the term “R&D credit” can be a misleading name.

Many engineering firms don’t realize that the design and development activities of creating structural, mechanical, and electrical systems can be considered qualifying activity to earn the R&D tax credit. It’s generally not a problem for these companies to show they meet the four-part test for a project to qualify because they don’t need to be developing revolutionary new solutions – there only needs to be technical uncertainty regarding the appropriate design being developed, and a process of evaluating the alternative, competing design options. What’s more, higher salaries paid to engineers, designers, drafters, and other technical employees can result in a potentially large credit for the firms that are assuming the economic risk for the work they do. Tri-Merit can help substantiate these claims and get the firm the return they deserve.

Examples of qualifying activities for engineering firms seeking the R&D credit may include:

  • The design and development of innovative new or improved infrastructure projects such as bridge structures, and light-rail systems
  • The design and development of innovative or unique waste-water treatment facilities, pump stations, or other water supply facilities
  • Drainage design, structural design, and other ancillary engineering design and development efforts
  • GIS and other software development activities
  • The design and development of SCADA and other control or management systems
  • Modeling and simulation of new or improved designs for testing and evaluation purposes
  • Computer-aided design (CAD) and computer-aided engineering (CAE) activities
“The Engineering Services in the US industry consists of Industrial and manufacturing projects, energy projects, project management services, commercial, public and institutional projects, transportation projects, municipal utility projects, telecom projects and other projects and services. “

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