Full-Service Firm in the Construction Industry Saves $110,000 with R&D Tax Credits
R&D Tax Credits for the construction industry have been saving organizations money since 1981. The credit was developed to encourage US businesses to maintain their competitiveness on a global scale. Unfortunately, many small and mid-sized business owners believe that only large corporations can use the credit. But that’s not true.
At Cunningham and Associates, we’ve been helping small and mid-sized organizations throughout various industries take advantage of the R&D Tax Credit. We specialize in identifying companies with R&D qualifying activities. Here’s how we helped obtain R&D Tax Credits for a full-service development firm in the construction industry.
Meet Our Construction Development Client
Our client is a full-service construction development firm based in the Boston, MA area. The company specializes in commercial construction of any size and offers a range of services, including pre-construction, construction management, design-build, general contracting, and due diligence services.
The client works with a range of industries, including retail, medical, corporate, science, technology, education, and hospitality. The company prides itself on offering creative, value-driven services on-time and on-budget. They take great care to tailor their services to customers’ needs and specifications.
But like many organizations in the construction industry, our client was unsure if they could save more money on taxes through the R&D Tax Credit.
At C&A, we’ve made it our specialty to look with a fine-tooth comb through our client’s business activities for things that would qualify them for the R&D Tax Credit and help them save thousands of dollars.
Before we could determine if our client qualified for the credit, we had to find and value its qualified research activities (QRAs) and qualified research expenses (QREs) that had been incurred for over three years.
First, we thoroughly examined designing and engineering methods, specifications, and engineering documents to identify the company’s qualified research activities.
Next, we had to make a site visit to observe the suspected R&D qualifying activities.
The Cunningham and Associates team has to reference the proper reports when completing credit calculations. During step three, our client provided the following information for this purpose:
- Company Internal Financial Statements
- Company Form W-2’s
- Annual Job Reports
- Construction Contracts
- Subcontractor Agreements
- Employee Time Allocations
- Vendor Costs
Identified Qualifying R&D Activities
When it comes to R&D Tax Credits for the construction industry, we have to identify qualifying activities related to building construction projects and understand the architectural and engineering processes our client uses. We uncovered the necessary R&D Qualifying activities in two stages.
Pre-construction Qualifying Activities
Engineering services and preliminary planning services are completed before the fun part, the construction, begins. This part of the construction development process includes possible R&D qualifying activities, like:
- Defining the project and scope
- Identifying potential roadblocks
- Planning and scheduling
- Cost estimation
- Needs analysis
Design-build R&D Qualifying Activities
Under a single contract, the project owner will work with the design-build team providing construction and design services. During this phase of construction development, a high degree of collaboration is required between contractors and designers.
The team works closely and collaboratively throughout the entire project — from start to finish. Designers and contractors contribute to the project’s aesthetics and functionality.
Over $110,000 Saved in R&D Credit Savings
Many qualifying R&D activities take place during the critical collaborations in the construction development process. The Cunningham and Associates team was able to analyze and identify those activities for our client.
Through our analysis, we also identified $2,545,640 in qualified research expenses. Our final investigation netted our client in the construction industry an R&D credit savings of over $110,000.
Reach Out to Get Started
Are you in the construction industry? Think of all the money you could save and invest back into your organization with R&D Tax Credits. The credit expires each year, so now is the perfect time to start exploring if your company qualifies.
At Cunningham and Associates, we like to make the process for qualifying for R&D credit savings easy for our clients. We conduct no-cost assessments, provide concrete numbers on the amount of expected credits, and offer an affordable fixed-fee to do so.
Contact us online or call us at (508) 797-5003 to get started.