Why mechanical contractors qualify
The four-part testNew designs count as R&D
A system design only has to be new to your company to count. It does not need to be new to the trade.
Every design-build job has unknowns
Will the system hold setpoint and fit the ceiling? Answering that is qualified work.
Coordination is experimentation
Load calculations, BIM clashes, and revised routing satisfy the experimentation test. Your normal workflow is the evidence.
The science is already there
Your designs rest on thermodynamics and fluid mechanics. For contractors, the science test is the easy part.
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- Design-build HVACDeveloping the mechanical design for a building or process is design work your company does. It qualifies.
- Load and energy modelingSizing equipment and ducts against calculated loads and energy targets is qualified evaluation.
- Sheet metal and piping fabricationDeveloping fittings, hangers, and assemblies for an unusual space is process development.
- Controls and sequencesWriting and testing sequences of operation and building automation integration is systems work under the statute.
- Routing and coordinationFinding a path for duct and pipe through a crowded building, and revising it, is documented problem solving.
- Retrofit and replacementFitting new equipment into an existing building raises questions that only design and trial answer.
- PrefabricationDeveloping racks and assemblies built in the shop and installed once is process research.
- Commissioning and balancingTesting a new system, finding what fails, and correcting the design is the experimentation test at work.
Where the credit comes from
The expenses that countDesign and shop wages
The time your estimators, detailers, and shop staff spend on qualified design work is the largest piece for most contractors.
Outside engineering
A share of what you pay U.S. engineering consultants on qualified design-build work counts toward the credit.
Prototypes and prefab
Materials consumed in mockups, prototype assemblies, and testing can count as supplies.
What does not count
Installation from finished drawings, service calls, and repeat work on settled designs stay out. The study draws that line honestly.
Common questions
We install from the engineer's drawings. Do we qualify?
Plan-and-spec installation rarely does. Design-build, design-assist, controls, and the problems the drawings leave open do.
Does residential replacement work count?
A like-for-like replacement does not. A job where you had to design the system, solve the airflow, or fit equipment into a space it was not made for can.
Do our shop detailers' hours count?
Yes. Detailing and fabrication development for a specific job is qualified work when it resolves a technical question.
Most of our work is fixed price. Does that matter?
Fixed-price work generally supports a claim, because your company carries the risk if the design fails. The study reviews the contract terms.
How far back can we claim?
Up to three prior tax years, by amended return. Credits you never claimed are still there to collect.
What records do we need?
The ones you already keep. Load calculations, submittals, shop drawings, sequences of operation, balancing reports, and job costing are the evidence. The study organizes them against the test.
What happens if the return is examined?
The people who wrote the study answer for it. Audit defense is included in every study 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