Architectural/Engineering Firm

Architectural/Engineering Firm

Client Profile
The client is an architectural and engineering firm based in Lexington, Kentucky. They provide a range of design and engineering services for various projects, including work for major educational institutions.

Process
McGuire Sponsel was engaged to complete both a Section 41 R&D Tax Credit study and a Section 174 IRC amortization study for the client. Our R&D Tax Credits team worked closely with the company’s CFO and President to efficiently stratify and filter projects, ensuring only those that qualified were included in the credit calculation. This was achieved by meticulously analyzing time tracking records to quantify the qualified percentage for employees working on eligible projects.

A key challenge in this engagement was transitioning the client from another provider who had not clearly explained the process of qualifying research expenditures. We addressed this by initiating the study with a comprehensive kickoff meeting, ensuring the client fully understood how research expenses are qualified. Throughout the engagement, a collaborative approach was used to maintain alignment between the client and our team regarding qualified projects and contracts.

Study Results
For the 2023 tax year, we calculated $74,999 in federal qualified research expenditures (QREs) for the client’s architectural and engineering activities. This resulted in an effective federal R&D Tax Credit amount of $1,281,824.