McGuire Sponsel’s expertise in the construction industry helps our clients maximize tax credits through R&D Tax Credits and 179D or 45L studies, and can create efficient tax structures for cross-border transactions through transfer pricing studies and IC-DISC. Our team of professionals have diverse backgrounds from engineering to construction management that brings unique value to your project.
Fixed Asset Services
Construction clients can benefit from the 179D tax deduction or 45L energy efficient home credit. Whether the facility is being renovated or newly built, energy-efficient inclusions may qualify for one of these programs.
The 179D Tax Deduction allows energy-efficient building improvements or new building construction to be eligible for a tax deduction of up to $1.80 per square foot. This deduction is available to taxpayers who build new assets or make upgrades to their lighting, insulations or HVAC systems. Additionally, architects and engineers that design energy efficient systems for government-owned buildings may also be eligible to take this deduction.
The 45L Energy Efficient Home Tax Credit allows newly constructed or renovated residential facilities to be eligible for a tax credit up to $2,000 per unit. This tax credit is available to taxpayers who have facilities that do not exceed three stories and have a higher energy efficiency than the 2006 IECC standards. Qualifying properties include single family homes, apartments, townhomes, condominiums, and assisted living facilities. Residential contractors that build energy-efficient homes or multi-family complexes may be eligible to earn this credit.
179D Success Story:
New Elementary School
An engineering firm specializing in the design of elementary schools recently contacted McGuire Sponsel to confirm eligibility for the Energy Efficient Commercial Building Deduction, commonly known as 179D, on a recently built 99,000 square foot school.
Our team determined the client was the primary design function for the building envelope, lighting, and HVAC systems. After obtaining the allocation letter from the school district allowing the engineering firm to claim the deduction, our team performed a tour of the facility and finalized the energy modeling. The result was a benefit of $53,477 based on a 30% tax rate.
Research & Development Tax Credits
Our team of engineering and tax experts assists architectural and engineering clients, specialty contractors, and general contractors identify and document qualified activities and expenditures to maximize the R&D tax credit.
The R&D Tax Credit may be a great opportunity if your clients design new buildings, structures and systems. Construction clients who develop new or improve existing construction methods, processes, tools or materials may also qualify.
Qualification for the R&D Tax Credit also requires technical and economic risk, meaning a company’s ability to claim the credit is based on the risk of technical failure and they must bear the economic risk of their product or process development. McGuire Sponsel works beside CPAs during the engagement and ensures that the client is able to utilize the credits generated by an R&D Tax Credit Study. Our team of CPAs, engineers and consultants take the necessary time to work with clients to explain how the credit intersects with their business in order to optimize the credit claim while reducing any exposure if audited.
R&D Success Story: Engineering Firm
McGuire Sponsel conducted a four-year R&D study for an architecture firm specializing in green building design. Our team of experts conducted on-site interviews with the architects and designers to determine the firm’s qualified projects, then analyzed the company’s time-tracking data to determine the percentage of time each employee worked on qualified projects for each study year.
The result of these qualified project and expenses was $125k in federal credits to the company.
Global Business Services
Whether it be a transfer pricing study, global structuring review and set up, or global tax compliance, McGuire Sponsel works alongside companies at every step to help lower their effective global tax rate, create efficient global business structures, and ensure all necessary global tax filing requirements are fulfilled. Qualifying clients include U.S.-based construction material exporters, or construction companies engaging in cross-border transactions.