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R&D Tax Credit for Construction / AEC

Custom structural, MEP, HVAC & materials solutions; BIM, prefabrication, modular construction methods.

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How the R&D credit applies to Construction / AEC

Architecture, engineering, and construction firms qualify when they engineer custom solutions rather than apply standard designs: novel structural systems, complex MEP and HVAC design, energy-performance optimization, and new materials or methods.

BIM-driven design iteration, prefabrication, and modular construction development are common qualifying areas where the buildable outcome isn't certain up front.

Work that often qualifies in Construction / AEC

Typical qualifying roles

Structural Engineer MEP Engineer Civil Engineer Architect BIM/VDC Engineer Construction Engineer Design Manager

Wages for time these roles spend on qualified research may count toward your credit.

Example credit scenario

Illustrative first-year ASC calculation

Qualified W-2 wages$360,000
Supplies$40,000
Cloud & computer rental$15,000
Contractor research spend$90,000
↳ 65% statutory haircut (IRC §41(b)(3))$58,500
Total QRE$473,500
Illustrative first-year ASC credit (6%) ≈ $28,410

Illustrative example using sample figures. Your actual credit depends on your facts; see Form 6765 and consult a tax professional.

The four-part test — applied to Construction / AEC

The IRS requires qualifying research to satisfy four tests. Here's how each typically maps in this industry:

Permitted purpose

The activity aims at improving a building's structural performance or energy efficiency.

Technological in nature

The work relies on structural and mechanical engineering.

Elimination of uncertainty

Unknown whether a custom system will meet load/energy targets.

Process of experimentation

Teams use iterative modeling, simulation, and mock-up testing.

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