Architecture is among the most highly qualified industries eligible to claim the R&D tax credit. Many qualified businesses overlook the incentive because architecture is not the first industry that comes to mind when you think of research and development; However, architects by definition are inventing new structures and the technical process involved with taking each structure from an idea to reality qualifies for the tax credit. Architecture is not just about aesthetics, architects must take into consideration functionality, quality and reliability when creating new designs. Additionally, architects employ the use of mathematics and advanced computer software to achieve desired results.

Although not all architecture firms follow the same process, many track the progress of each project through five phases: schematic design, design development, construction documents, bidding, and construction administration. Typically, the qualified activity occurs in the first three phases. For example, the following activities could potentially qualify for the tax credit:

  • Completing preliminary sketches depicting potential design options with different specifications and building materials in the schematic design phase;
  • Expanding upon the initial design concept, considering design alternatives, and finalizing the design in the design development phase; and
  • Analyzing how the design parameters affect the constructability of the project in the construction documents phase.

What makes these activities qualified is that they all focus on resolving technical uncertainty that arises over the course of the project. Whether the uncertainty is rooted in the capability of accomplishing a project under the required specifications, the method used to accomplish the project, or the ultimate design to accomplish the project – these activities move the project closer to completion.

Regardless of whether your firm follows the typical architecture process, your firm may qualify for the tax credit if you are creating new designs. The experts at Parachor are experienced in determining qualified activity and tracking that activity to qualified research expenses. Contact Parachor to find out if your business qualifies for the R&D tax credit.