Frequently Asked Questions


R&D Tax Credits are available to any business in any industry that performs qualifying research activities.
The R&D tax credit is for taxpayers who design, develop, or improve products, processes, techniques, formulas, or software. It’s calculated on the basis of increases in research activities and expenditures—and as a result, it’s intended to reward companies that pursue innovation with increasing investment.

In order to benefit from R&D, all research activities performed by qualifying companies must be thoroughly documented. Our team of tax-saving experts will create and provide guidance on the needed documentation.
You can claim the R&D Tax Credit by filing IRS Form 6765 with your income tax return. Before you file, you should consult an accountant who will be able to help you determine which adequate documents you should keep during the year to ensure you qualify.
The R&D tax credit can be calculated in two ways: the regular credit method and the alternative simplified credit method. NTG uses both methods, for any given tax year, to see which yields the larger tax credit.

In the regular credit method, the credit can be calculated by 20% of the company’s current year qualified research expenses (QREs) over a base amount.

When calculating these, the base amount must not be less than 50% of the current year’s QREs and the fixed base percentage must not exceed 16%.
First enacted in 1981, the R&D Tax Credit has evolved over time through new legislation, regulations, and judicial precedents that expanded the number of businesses that can benefit from the incentive. Two of the most prominent changes have occurred over the past 20 years. In 2003, the Discovery Rule was removed from the law. This meant that research activities no longer had to be “new to the world”, but instead “new to the taxpayer” – a standard that favors taxpayers. In 2015, the Protecting Americans from Tax Hikes (PATH) Act made the R&D Tax Credit permanent and modified the credit to benefit small and mid-size businesses while also opening up its availability to startups.
Startups and small businesses may be able to qualify for up to $1.25 million ($250,000 each year for up to five years) of the federal R&D Tax Credit to offset the Federal Insurance Contributions Act (FICA) portion of their annual payroll taxes.
Current tax reforms have made the R&D credit more valuable with decreased tax rates. The credit can now be used to offset AMT. And NOL deductions can only offset 80% of taxable income.
The R&D tax credit drives economic growth by encouraging innovation and invention. It can drive profits and help businesses stay ahead of the competition. R&D can help reduce production costs and corporate income tax.


The 179D Tax Deduction is for Architects, Engineering Firms, and Commercial Building Owners. This deduction is especially profitable for new build projects with a tax deduction of $1.80 per square feet (renovations are at the rate of $1.20).
Properties placed in service (New Construction or Renovation) after December 31, 2006 are eligible for incentives.

For the 179D, you will need to have the following from a builder:


  • Current full set of architectural plans that include all specifications
  • Energy compliance documents for lighting, HVAC, and envelope (Title 24 or IECC)
  • EnergyPro File – computer file used to generate T-24 documentation
  • A contact person and phone number
A company can claim a section 179D deduction by receiving a Section 179D study in the same tax year as when the building is placed in service. If the building or project meets the requirements of the study, it can report the deduction on its current-year tax return. We always advise meeting with a 179D expert before claiming a deduction.

Cost Segregation

Cost segregation studies are a strategic tax planning tool that is completed to maximize federal income tax depreciation deductions by identifying fixed assets and their costs. This engineering-based study gives you an exact tax plan to accelerate property depreciation and helps cut your costs on any real estate that has been constructed, remodeled, or purchased. It allows for real and personal property to be categorized into acquisition/construction costs and then applied to the appropriate IRS tax credit.
Through a cost segregation study, properties can be reclassified from a standard 39-year depreciable life to a 5, 7, or 15-year depreciable life, which enhances federal tax credit savings, and improves cash flow. Building and property owners are also able to retrieve missed deductions from previous years.
A cost segregation study will include the following: on-site auditing, service benchmarking, documentation as per IRS guidelines, the creation of tax deduction strategies, allocation of all indirect costs, identifying substantial amounts of accelerated depreciation, KPI measurement, legal compliance, and final reports for easy-to-use data for tax planning.
A Cost Segregation study should be completed after the purchase, remodel, or construction of a property. Although, the best time for a study with new owners is during the year a building is constructed, purchased, or remodeled.
Always make sure to research the bio and resume of any persons signing your cost segregation study. Additionally, the provider needs to be certified by the American Society of Cost Segregation Professionals (ASCSP). A designated Certified Cost Segregation engineer, or CCSP, is the most accurate provider.
Yes, our tax experts at NTG will be there with you every step of the way to ensure success.
With the combined expertise of engineers, construction specialists, and accounting professionals, we can handle complex and time-sensitive cost segregation studies. Our main objective is to facilitate maximum tax savings and improve cash flow.


To be eligible for a 45L tax credit, you must apply to all of the following statements:


  • Project must be three stories or less above ground (not including below-grade parking)
  • Project must be built on the territory of the United States
  • Project must meet construction standards based on those set by the 2006 International
    Energy Conservation Code (IECC)
  • Project must be completed between August 8, 2005, and December 31, 2021
  • Construction can include “substantial” rehabilitation and reconstruction
The following can benefit from the 45L Tax Credit: Individuals, A trust, An estate, A partnership, An association, A company, or A corporation.
45L is a lucrative tax incentive for the construction or renovation of single-family homes and low-rise residential buildings that have reduced its energy consumption by 50%.
In order to receive the benefits, a detailed energy analysis must be certified by a third-party engineering firm. Our tax experts will ensure that you provide all documentation needed to sustain an IRS audit, and receive maximum tax credits.
45L allows qualifying builders and contractors to collect up to $2,000 for each dwelling unit of property that meets the certified energy-efficient standards.

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