The R&D tax credit for professional services is often misunderstood. Many engineering firms, technology consultants, software developers, architects, and specialty consulting firms perform technical work every day, but that does not mean every client project qualifies for the credit. Eligibility depends on the activities performed within a project, the technical uncertainties the team faced, the alternatives evaluated, and the expenses connected to that work. The firm’s industry classification or job titles are not enough by themselves. A professional services firm may have qualifying activities buried inside a much larger engagement. An engineering project may include eligible design testing as well as routine drafting. A software implementation may involve qualifying architecture development along with standard configuration and data migration. An architect may evaluate several technical building-envelope systems while also completing aesthetic and administrative work that does...
