As the name implies, Bob works in construction. As a building contractor, Bob the Builder and his anthropomorphized machine team are always ready to help with renovations, construction, and repairs all while demonstrating the power of positive thinking, innovative problem-solving, teamwork, and follow-through.
Perhaps surprisingly for a kids show, Bob and the team often engage in real-world construction-related experiences. With each new job, they face unique challenges to overcome, requiring some level of concept development, design, and determining new and improved ways to use materials, building processes, and technique.
Even though Bob is already wildly successful, imagine how much more he could achieve with knowledge about the Research and Development Tax Credit (R&D Tax Credit). Much of the activity that he and his team are engaged in most likely qualifies as research according to the broad definition of “research” that satisfies the legal tests for the R&D Tax Credit.
How about you? As a construction firm owner, did you know that tax credits for construction companies may be available to you, all from your design and build professionals doing their daily jobs? Many of the activities they perform can qualify for the R&D Tax Credit.
Here are some specific examples of qualifying activities that can lead to tax credits for contractors:
The R&D Tax Credit has the potential to increase your tax savings when you capture all the qualified research expenses (QREs) related to those research activities. For construction firms, significant QREs come from wages paid to in-house computer-aided design/manufacturing (CAD/CAM) designers, technical drawers, engineers, project foremen and similar technical personnel who perform research activities for the firm.
Additionally, construction firms often hire contractors/subcontractors to help them design and build their construction projects. These activities might be QREs if they meet the legal definition of “research” and the construction firm has substantial rights to the research done on their behalf and they take on the risk of development.
The R&D credit is one of the largest incentives available to construction contractors and can possibly save your company hundreds of thousands of dollars annually.
Let CTI’s elite tax professionals do the work to navigate through substantiation and documentation to achieve a superior outcome, maximizing credits for your business.
Partner with CTI, allowing our team of attorneys, CPAs, engineers, and scientists with ‘Big 4’ experience to identify which activities are eligible for the credit and what expenses can be used to maximize tax savings for your construction business.
See what you can learn from a kids show?