Architecture firms — companies that design buildings and spaces — may perform activities that warrant analysis under the federal R&D tax credit. This page explains what design work may be relevant. It is educational and is not individualized advice. For the foundational framework, see our page on qualified research.
What R&D May Look Like in Architecture
Architecture involves design development, building systems, materials evaluation, and performance analysis. Work directed at resolving genuine technical uncertainty about functional or performance targets may warrant review. Routine design, cosmetic work, and standard practice do not, by themselves, constitute qualified research.
Industry-Specific Examples of Technical Development
- Developing building envelope or facade systems to achieve a specified performance target where the appropriate design is uncertain.
- Developing alternative structural or building systems to meet a performance, cost, or constructability target where the appropriate approach is uncertain.
- Testing alternative materials or assemblies to meet a performance target where the capability is uncertain.
- Developing approaches for difficult site or climate conditions where the appropriate method is uncertain.
- Developing daylighting, energy, or environmental design strategies to achieve a specified performance target where the appropriate approach is uncertain.
- Developing modular or prefabricated design approaches to achieve a target where the method is not established.
Technical Uncertainty Examples
- Whether an alternative envelope system can achieve a specified thermal or moisture-performance target.
- Whether a new building system can meet a structural or performance target for a specific application.
- Whether an alternative material can meet a performance and durability target in a specific climate.
Process-of-Experimentation Examples
A process of experimentation may involve modeling or simulating alternative designs and measuring performance, testing alternative materials or assemblies and evaluating results, or constructing mockups and measuring performance.
Potential Business Components
Potential business components may include a new or improved building system, a new or improved envelope or facade design, a new or improved material or assembly, or a new or improved design approach.
Employee and Contractor Work
Employees whose work may warrant analysis include architects, building-science specialists, design engineers, and sustainability analysts. Contractor work may include outside engineering firms, testing laboratories, or consultants performing development work on behalf of the firm.
Activities That Generally Require Caution or May Not Qualify
- Routine design and documentation following established methods.
- Cosmetic or aesthetic design work without a technical performance target.
- Standard sizing and selection using established methods.
- Ordinary coordination and project management.
- Simple material selections without a technical development question.
Documentation That May Help
Records that may help include design development records, performance modeling or simulation results, material or assembly test data, and records connecting personnel to specific development projects.
Example Hypothetical Project
The following is a hypothetical example for illustration only.
An architecture firm is developing a building envelope system for a project in an extreme climate intended to achieve a specified thermal and moisture-performance target. The technical uncertainty is whether an alternative combination of materials, assembly, and detail approach can achieve the specified target. The team models alternative designs, tests material assemblies, and evaluates performance. Professional review is still needed.
Questions to Ask Internally
- What specific system, material, or approach was being developed or improved?
- What technical uncertainty existed at the outset?
- How does this differ from routine design or cosmetic work?
Relationship to the Four-Part Test
The four-part test applies the same way as in any industry. The work must satisfy all four elements: permitted purpose, technological in nature, elimination of uncertainty, and process of experimentation. Style, taste, and cosmetic changes are excluded from qualified purpose under Section 41(d)(3).
Key Takeaway
Architecture firms may perform activities that warrant analysis under IRC §41 — particularly work involving performance-driven design development, building systems, and materials evaluation. Routine design and cosmetic work do not automatically qualify. Because these determinations are fact-specific, professional review is appropriate. For related industries, see structural engineering firms and MEP engineering firms.