Construction R&D Credit
For many in the construction industry, “R&D” sounds like something that happens in a laboratory, not on a job site. However, this powerful tax incentive is designed to reward the practical problem-solving and innovation that are essential to modern construction projects.
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Eligibility isn't determined by the finished building, but by the process of figuring out how to build it when faced with a technical challenge. If your team is developing new or improved methods, materials, or processes to overcome unique project requirements, you are likely performing qualifying R&D. This includes any systematic effort to improve efficiency, safety, or sustainability, even if a new technique is tested and not ultimately used.
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Qualifying activities can be found in most phases of a construction project:
Innovative Design & Digital Construction
This involves the planning and modeling required for complex or unique projects.
• Developing prototypes and using Building Information Modelling (BIM) to solve design challenges.
• Designing and integrating new or improved mechanical and electrical systems.
• Undertaking projects that require an extra level of testing or certification.
Advanced Methods & Materials
This category covers the development of new ways to build and the materials used.
• Creating unique assembly or construction techniques for a specific project.
• Experimenting with new, improved, or more reliable building materials.
• Developing environmentally friendly or sustainable building methods and processes.
Job Site & Equipment Improvement
This includes adapting tools and processes to meet the demands of a specific job site.
• Modifying tools, equipment, or materials to improve efficiency or adapt to environmental conditions.
• Developing innovative scaffolding, automation, or other processes to meet new safety regulations.
• Identifying and implementing significant technological improvements to construction processes.
Essentially, if your project requires you to go beyond standard building practices to solve a technical problem, you are likely performing R&D that qualifies for this valuable credit.