After bouncing back from the economic downturn of 2008, the architecture and engineering service industry has steadily increased in productivity and profitability. One of the keys to the recovery has been investment in good, talented personnel.
That said, the qualified personnel performing the work are the same personnel driving profitability. Profitability means increased taxes despite their wage deductibility. To make matters worse, the industry has reported increase in voluntary turnover and talent acquisition costs.
The good news is that the same talented personnel that are driving profitability are not just deductible, they can also help generate a R&D credit to really put a dent in the tax burden.
The following lists example types of qualified R&D activities:
Annual Revenue: $60mm
R&D Tax Credit: $210k
Qualifying Activities: Designing Master Plans, CAD Modeling
Qualifying Personnel: Lead Engineers, Staff Engineers, Design Team
Annual Revenue: $13mm
R&D Tax Credit: $91k
Qualifying Activities: Developing Design Drawings, CAD Modeling
Qualifying Personnel: Architects, Team Lead, CEO/Owner (Licensed Architect)
Annual Revenue: $3mm
R&D Tax Credit: $55k
Qualifying Activities: Design Development, Schematic Design, CAD Modeling
Qualifying Personnel: Lead Architect, President (Licensed Architect)