Why integrators qualify
The four-part testEvery custom system counts
Each engagement is a system engineered for one space. It only has to be new to your firm, not to the world.
No two jobs are the same
Odd geometry, mixed platforms, a design nobody has built before. Not knowing the final design at the start is exactly what the credit rewards.
Bench testing is experimentation
Competing hardware on the workbench, markups on the floor plan, redesigns on site. Your normal workflow is the evidence.
Programming is the science
Custom control programming and making platforms talk to each other is computer science, and computer science passes the test.
A short study shows which of your projects qualify, and proves it. Read the four-part test in the words of the statute.
What qualifies in practice
Work you already bill for- Custom control programmingWriting and iterating scenes, drivers, and logic on platforms like Crestron, Control 4, and Savant is qualified work.
- Cross-platform integrationMaking systems that were never meant to talk to each other work as one is documented problem solving.
- System design for the spaceEngineering audio and video around a room's real geometry, sightlines, and acoustics counts.
- Video wall engineeringSynchronizing displays, content pipelines, and processors into one seamless surface takes technical iteration. The iterations count.
- Lighting scenes and controlDesigning and tuning custom lighting behavior, chases, and automation logic is qualified development.
- Bench prototypingCompeting brands, drivers, and mounting approaches tested on the workbench before a design is chosen are the experiment record.
- In-house tools and softwareSoftware your team builds to run scheduling, design, inventory, or field work is R&D in its own right.
- On-site redesignWhen the drawn plan meets the real site and has to change, that problem solving qualifies too.
- Undocumented takeoversReverse engineering another firm's install with no drawings, toning every wire to rebuild the map before the new design can work, is qualified investigation.
- Custom fabricationMounting hardware engineered and built for one install, cut and tested until it fits the space, is experimentation in metal.
Where the credit comes from
The expenses that countTechnician and programmer wages
The time your programmers, designers, and lead techs spend on qualified projects is the largest piece for most firms, owners included.
Outside contractors
A share of what you pay U.S. contractors for qualified design and programming work counts toward the credit.
Supplies and cloud computing
Materials consumed working out a build, and cloud hosting behind your systems and tools, can count as well.
What does not count
Routine installs, equipment you capitalize, and sales time stay out. The study draws that line honestly.
Common questions
Is the credit really dollar for dollar?
Yes. A credit reduces your tax bill directly, dollar for dollar, which makes it worth far more than a deduction of the same size.
What if we cannot use the whole credit this year?
Unused credit carries forward up to twenty years, and up to three prior years can be claimed by amended return. It stays on your balance sheet as an asset.
Can you study the current year before it ends?
A study covers completed tax years, so work happening now is studied early next year once W2s are out and the books are closed. Open prior years can be claimed in the meantime.
Do cloud and AI costs count?
Cloud hosting used in qualified work can count as a research expense. Where newer costs like AI usage fit is a case-by-case analysis, and the study looks at every category.
When do we pay for the study?
The balance is due when your completed study is delivered, never contingent on the outcome. IRS rules for licensed practitioners require it to work that way.
You know our industry. Can you just use standard numbers?
No, and you would not want us to. Cookie-cutter claims are what draw scrutiny. Interviews and employee surveys make the numbers yours and defensible.
We built a demo system in our showroom to learn a new product line. Can that spend count?
It can. Materials for a true prototype qualify as research supplies when the build involved real engineering uncertainty and your books expensed them up front, while equipment you capitalize and depreciate stays out.
Does our accountant have to do anything special?
No. You hand them the finished forms and numbers, and if their software is unfamiliar with the credit we walk them through the entry at no added cost.
Which form does the credit go on?
Form 6765, filed with the return. From there it carries onto Form 3800 as part of the general business credit. The Form 6765 guide and the Form 3800 guide walk a CPA through both.
Thirty minutes shows whether you qualify.
Book a call and bring the person who knows the work. We will cover whether your projects qualify and what a credit could be worth.
Book a call Or write to inquiries@thefoundryfirm.com