R&D Tax Credit for Engineering and Architecture Firms

Last reviewed October 12, 2026

Engineering and architecture firms routinely solve technical problems that meet the R&D tax credit requirements — designing structures for unusual conditions, developing systems to meet novel specifications, and engineering solutions where the outcome is uncertain.

What qualifies

Design and engineering work qualifies when it meets the four-part test. The credit applies to activities where your team faces genuine technological uncertainty and evaluates alternatives through a process of experimentation — not to routine application of standard methods.

Common qualifying activities

Structural engineering

• Designing foundations for unusual soil conditions or load requirements where the approach requires analysis and iteration
• Engineering structural systems to withstand seismic, wind, or blast loads beyond standard code provisions
• Developing connection details or framing systems for novel geometries or material combinations
• Analyzing and designing retrofit solutions for existing structures with uncertain conditions

Mechanical, electrical, and plumbing (MEP)

• Designing HVAC systems for specialized environments (clean rooms, data centers, laboratories) where thermal or airflow performance is uncertain
• Engineering electrical distribution systems for unusual load profiles or redundancy requirements
• Developing plumbing or fire protection systems for complex building configurations
• Integrating building automation and control systems where performance trade-offs require experimentation

Civil engineering

• Designing stormwater management systems for challenging site conditions
• Engineering grading and drainage solutions where soil behavior is uncertain
• Developing transportation infrastructure under unusual constraints

Custom fabrication and construction methods

• Developing new construction sequences or methods for projects with unusual constraints
• Engineering prefabrication approaches where dimensional accuracy or structural integrity is uncertain
• Designing formwork, shoring, or temporary structures for complex pours or lifts

Sustainable design

• Engineering building envelopes to meet aggressive energy performance targets where the combination of systems requires iterative analysis
• Developing passive cooling, daylighting, or ventilation strategies for unique building types
• Designing renewable energy systems where integration with building systems creates technical challenges

What does not qualify

• Applying standard engineering methods with known outcomes
• Routine code compliance checks
• Repeating a design approach that has been used successfully before with no new uncertainty
• Aesthetic design decisions that do not involve technical problems
• Project management and administrative activities

Qualifying expenses

Engineering firms' QREs are primarily wages — the time engineers, designers, and technical staff spend on qualifying activities. Contract engineering performed by subconsultants on your behalf may also qualify at the reduced inclusion rate.

Supplies such as physical models, test specimens, and prototyping materials consumed during the design process can also count.

Related pages

• What Qualifies — the four-part test in detail
• Qualified Research Expenses — what expenses count
• Documentation Requirements — what records to keep
• Estimate your credit — free calculator

Frequently asked questions

Do engineering firms qualify for the R&D tax credit?

Yes. Engineering firms qualify when their project work involves technological uncertainty — designing structures or systems where the solution is not straightforward, developing new methods or approaches, or solving technical challenges that require evaluation of alternatives.

Does custom engineering work for clients qualify?

It can. If a project requires your engineers to resolve technological uncertainties — rather than applying known solutions from standard practice — the qualifying portions of that work can generate R&D credits, even if the work is performed under a client contract.

Can civil engineering projects qualify?

Yes, when they involve technological uncertainty. Designing a foundation system for unusual soil conditions, developing new stormwater management approaches, or engineering solutions for unique structural challenges can qualify.