R&D Tax Credits  /  Engineering
R&D Tax Credits · Industries

R&D tax credits for
engineering firms.

If your firm solves technical problems, evaluating structural, mechanical, electrical, or civil design alternatives under real uncertainty, a meaningful share of that work likely qualifies. Most engineering firms leave the credit on the table.

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The Opportunity

Engineering is R&D by definition.

Engineering firms resolve technical uncertainty every day: whether a design will perform, which system or material is right, how to meet a hard constraint. That is precisely what the credit rewards. Yet many firms assume it’s only for products or laboratories, and never claim what they’ve earned.

What Qualifies

The work that counts.

Design & analysis

  • Developing and evaluating design alternatives to meet performance or structural requirements
  • Structural, seismic, thermal, load, or fluid analysis and modeling
  • Evaluating alternative materials, systems, or construction methods
  • Energy modeling and sustainable-design optimization where uncertainty exists

Systems & methods

  • MEP system design and optimization
  • Developing means and methods for construction or fabrication challenges
  • Geotechnical and site-specific engineering solutions
  • CAD/BIM modeling and simulation to resolve design uncertainty
  • Prototyping, testing, and iteration
Example Projects

What it looks like in practice.

Structural redesign

Evaluating alternative framing systems to meet load and cost constraints on an atypical structure.

MEP optimization

Modeling HVAC and electrical alternatives to hit energy targets in a complex building.

Site challenge

Engineering a foundation solution for poor soils where standard approaches wouldn’t hold.

Worth Knowing

The funded-research question.

For firms doing client work, whether a project qualifies often turns on who bears the financial risk and who retains rights. If your payment is contingent on results and your firm keeps rights to the solution it develops, the work is more likely to qualify. If the client bears the risk and owns the results, it may be “funded research” and excluded.

We analyze each contract before claiming it, because getting the funded-research line right is what separates a defensible engineering claim from a risky one.
The Test, Applied

How the four-part test lands here.

01

Permitted purpose

A new or improved design, system, or method, better performance, reliability, or efficiency.

02

Technological in nature

Grounded in engineering principles, structural, mechanical, electrical, civil, or thermal.

03

Elimination of uncertainty

It was uncertain whether the design would perform, or which approach was right.

04

Process of experimentation

Resolved through analysis, modeling, simulation, and evaluating alternatives.

Common Questions

Questions we hear.

We’re a services firm, not a product company. Do we qualify?

Engineering services routinely qualify when the work resolves genuine technical uncertainty. The credit is not limited to manufacturers.

Does client-funded work count?

It depends on the contract, specifically who bears financial risk and who retains rights. We review your agreements to draw the line correctly.

What about routine drafting and CAD time?

Routine drafting generally doesn’t qualify, but modeling and analysis performed to resolve design uncertainty often does. We separate the two.

See what your work qualifies for.

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This page is general information, not tax or legal advice. Whether specific activities and expenses qualify depends on the taxpayer’s facts and applicable law, and is determined through the appropriate R&D study. Novaric does not guarantee eligibility, credit amounts, or any IRS outcome.