Federal R&D Tax Credit Guidance for Construction CFOs

This guide provides an overview of the Federal Research & Development (R&D) Tax Credit specifically tailored for construction CFOs. It outlines the credit's purpose, which is to incentivize companies investing in new processes and technologies, including those in the construction sector. The document details the history of the R&D Tax Credit, including its introduction in 1981 and subsequent legislative changes that have expanded its benefits. It explains the methodologies for calculating the credit, including Qualified Research Expenditures (QREs) and the Alternative Simplified Credit (ASC) formula. Furthermore, it describes the Four-Part Test that construction firms must meet to qualify for the credit. The guide also highlights recent legislative developments that enhance the credit's accessibility, such as the restoration of immediate expensing for domestic research costs. Practical steps for CFOs are provided to help identify qualifying activities, implement tracking systems, and ensure compliance with IRS requirements.