Project Summary
CSSI Services completed a federal and state R&D Tax Credit study for an architecture firm that was redesigning an aging public library to meet strict net-zero energy targets. The engagement focused on identifying and documenting qualifying research and experimentation activities conducted throughout the tax year, applying CSSI’s engineering-based methodology to ensure every dollar claimed is accurate, compliant, and fully defensible under IRS scrutiny. Through the study, the firm claimed $79,354 in State Credits and $226,548 in Federal Credits.
Project Overview
To qualify for the R&D Tax Credit, each activity must satisfy the IRS four-part test. CSSI’s analysis confirmed that the qualifying activities identified for this company met all four criteria:
- Business Component: Improving the building’s performance and quality by drastically reducing energy consumption.
- Elimination of Uncertainty: Technical uncertainty exists regarding which combination of HVAC systems, insulation, and window glazing will achieve net-zero status while maintaining occupant comfort.
- Process of Experimentation: The firm used energy modeling, multiple daylighting simulations in BIM, and tests three different façade designs for thermal load.
- Technological in Nature: The design process relies on thermodynamics, physics, and environmental science.
|
Employee Wages |
$4,539,568 |
|
Supply and Contractor Costs |
$0 |
|
Total QRE’s |
$2,564,689 |
|
Total State Credit |
$79,354 |
|
Total Federal Credit |
$226,548 |
Study Results
The analysis identified a total of $2,564,689 in Qualifying Research Expenses (QREs) across the tax year. The entire QRE figure was driven by employee wages, which came in at $4,539,568 in total payroll with $2,564,689 attributable to qualifying research activities. No supply costs or contractor expenses were identified for this engagement. Based on those qualifying expenses, the study produced a federal R&D Tax Credit of $226,548 and a state R&D Tax Credit of $79,354, bringing the firm’s combined tax credit benefit to $305,902.
Key Takeaways
- Every QRE came from in-house talent: With $0 in supply costs and $0 in contractor expenses, the firm’s qualifying research was 100% wage-driven. That tells a clear story, this firm’s innovation lives inside its design and technical teams rather than in outsourced labor or material experimentation.
- Meaningful, immediate impact: This study generated more than $305,000 in combined federal and state tax credits, real cash flow that can be reinvested directly into the firm’s people, projects, and technology.
- A high share of payroll qualified: Of the firm’s $4.5 million in total wages, roughly 57% was attributable to qualifying research activities. That ratio reflects how deeply technical problem-solving is embedded into the firm’s everyday project work, not isolated to a few specialized roles.
- Roughly $4,500 in credit per employee: Spread across 68 team members, the combined $305,902 in credits works out to about $4,500 per employee, a tangible way to frame how the firm’s investment in skilled labor translates into recovered cash flow.
- A federal-heavy benefit structure: The federal credit of $226,548 outpaced the state credit by nearly 3-to-1, a reminder that the federal R&D credit typically represents the larger share of the benefit while state credits deliver meaningful incremental value on top.
Ready to Discover Your R&D Tax Credits Potential?
If your company is developing or improving products, formulas, or processes, you may be leaving significant tax credits on the table. CSSI’s engineering-based approach ensures every qualifying activity is identified, documented, and defensible, so you capture the full value of the work your team is already doing.
Request a Free Analysis today and find out what your business could qualify for.
