Energy & R&D Tax Incentives
Tax Credits You May Not Know You Qualify For.
Federal tax incentives for research activities and energy-efficient improvements have been available for decades. Many businesses and property owners leave them unclaimed simply because they don't know they qualify.
1981
R&D credit since
$5/sq ft
179D max
$5,000/unit
45L max
Free review
First step
Overview
Two Distinct Incentive Areas
This page covers two separate federal tax incentive programs that UFS helps clients identify and claim: Research & Development (R&D) Tax Credits and Energy Tax Incentives.
Research & Development
Research & Development (R&D) Tax Credits
What It Is
The R&D Tax Credit was established in 1981 to encourage U.S. companies to invest in innovation. It provides a dollar-for-dollar federal tax credit for qualifying research and development activities.
Who Qualifies
Qualification is based on the nature of the activities your business performs, not the industry you're in. If your company develops or improves products, processes, software or formulas — and that work involves technical uncertainty and experimentation — you may qualify.
The Four-Part Test
Permitted purpose
The activity must relate to developing or improving a product, process, software, technique, formula or invention.
Technological in nature
The activity must rely on principles of physical, biological, computer or engineering science.
Elimination of uncertainty
The activity must be intended to discover information that eliminates technical uncertainty about the development or improvement.
Process of experimentation
The activity must involve a process of evaluating alternatives — through modeling, simulation, testing or trial and error.
Industries That Commonly Qualify
Energy tax incentives
Energy Tax Incentives
Federal energy tax incentives reward commercial property owners, developers and builders who invest in energy-efficient improvements.
Section 179D — Commercial Building Energy Deduction
Commercial building owners and designers
A tax deduction of up to $5.00 per square foot for commercial buildings that meet energy efficiency standards.
Note: Deduction amount depends on the level of energy efficiency achieved and the year the property was placed in service.
Section 45L — Energy-Efficient Home Credit
Developers and builders of residential units
A federal tax credit of up to $5,000 per dwelling unit for developers and builders of energy-efficient new homes, apartments and condominiums.
Note: Credit amounts and eligibility standards vary by year and unit type. Certification by a qualified energy rater is required.
Investment Tax Credit (ITC)
Businesses and property owners installing renewable energy systems
A federal tax credit for businesses that install qualifying renewable energy systems — including solar photovoltaic, solar thermal, fuel cells, small wind turbines and geothermal systems.
Note: Credit percentages and phase-down schedules have changed under recent legislation.
A fact-based review
What We Review
Eligibility for tax incentives depends on the facts of each business activity or property project. The review focuses on the records and technical details needed to evaluate potential opportunities with your tax advisor.
Business activities
For R&D, we discuss the work performed to develop or improve products, processes, software, techniques or formulas.
Project documentation
Available project records, specifications and supporting materials help evaluate energy-related opportunities.
Cost and wage information
Relevant expense, wage and project-cost information supports a more complete qualification analysis.
Tax advisor coordination
We coordinate with your CPA or tax advisor so potential credits and deductions can be considered appropriately.
How it works
How the Process Works
Initial review
We review your business activities, property details or construction projects to identify which incentive programs may apply.
Qualification analysis
For R&D credits, we document qualifying activities, wages and expenses. For energy incentives, we review project specifications.
Credit calculation and documentation
We prepare the supporting documentation and calculations required to substantiate the credit or deduction on your tax return.
CPA coordination
We work with your CPA or tax advisor to ensure the credits are properly claimed and all required forms are filed.
Common questions
Frequently Asked Questions
Find Out What You May Qualify For
We start with a no-obligation review of your business activities or property to identify which incentives may apply.
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