All across the nation, Civil Engineering Firms are consistently missing out on millions of dollars in Federal Tax Incentives!
Simple. Federal Tax Incentives have been crafted, passed, and signed into law making hundreds of millions of dollars available. For some reason, Civil Engineering firms consistently fail to capture the money allocated for them.
Part of it is the fault of government and their lack of effective naming of the Incentives they pass. The Section 41 Credit is inadequately named the “Research Credit”. This poor title makes it sound like it was created to provide funding for medical laboratories. Fortunately, the Incentive is so broad, that almost all U.S. based Manufacturing, Engineering, Software Development, and Fabrication firms qualify for money.
How much is available?
We have found Civil Engineering firms, on average, are able to qualify for approximately 25% of total company payroll. For example, a typical firm with a $2,000,000 company payroll will be able to qualify $500,000 of their payroll toward the Section 41 Incentive. The gross benefit of this would be anywhere from $25,000 – $50,000 per year (and firms are allowed to go back three open tax years!).
Why doesn’t the CPA just handle this?
To put it bluntly, they are not qualified. Specialized tax incentives such as this are extremely technical and backed by myriads of case law. CPAs do not have the time nor the knowledge to investigate, determine, procure, and defend specialized tax incentives such as the Section 41.
How should Civil Engineering firms determine their qualification?
First off, they should not file another tax return or remit the next quarterly estimated payment until they have consulted a specialist in this area. A true specialist will be able to provide a solid estimate of benefits through a brief phone consultation.
Please do not let the government’s failure to name an Incentive properly keep you from capturing your benefits in full. Nearly all Civil Engineering firms qualify for Section 41 money.