R&D Opportunities in Architecture and Design

Architecture and design firms innovate every day through modeling, materials, and sustainability, yet most don’t realize they qualify for the R&D tax credit. Learn which activities count and how to claim this valuable incentive.
By
Michael Cadenhead
October 8, 2025

TL;DR

Architects and designers innovate with every project, experimenting with materials, modeling energy performance, or solving unique structural and aesthetic challenges. Yet many don’t realize these activities qualify for the R&D tax credit. This blog explains how architectural and design firms can identify qualifying work, what expenses to include, and how to claim the credit with confidence.

Innovation Is the Foundation of Architecture and Design

Modern architecture is defined by creative problem-solving grounded in technical precision. Every design phase, from concept sketches to material testing, involves eliminating uncertainty and refining performance.

Architecture and design firms routinely:

  • Test new building envelopes or façade systems.
  • Model energy use and daylight performance.
  • Integrate smart technology and new materials.
  • Prototype 3D or digital models before construction.

All of these activities fall within the IRS framework for qualified research activities (QRAs).

Why the R&D Tax Credit Applies

The IRS uses four criteria to determine if work qualifies as R&D:

  1. Permitted Purpose – The activity aims to improve function, performance, reliability, or quality.
  2. Elimination of Uncertainty – The outcome isn’t known upfront; alternatives are explored.
  3. Process of Experimentation – Multiple solutions are tested or modeled before final design.
  4. Technical in Nature – The work relies on principles of engineering, architecture, or computer science.

Most architectural and design work checks all four boxes, especially when projects involve new performance standards, materials, or environmental goals.

Examples of Qualifying Architectural Activities

1. Building Design and Modeling

  • Testing new layouts or structural systems for efficiency or code compliance.
  • Running energy or daylight simulations to optimize performance.
  • Developing unique rooflines or façades to reduce load or improve airflow.

2. Material Selection and Testing

  • Experimenting with new insulation, glazing, or façade systems.
  • Comparing performance of sustainable or recycled materials.
  • Modeling moisture, sound, or thermal resistance.

3. Sustainability and Green Building Innovation

  • Designing for LEED, WELL, or net-zero standards.
  • Testing passive cooling or heating strategies.
  • Integrating renewable energy systems like solar or geothermal.

4. Digital and Physical Prototyping

  • Using 3D printing or modeling to validate design concepts.
  • Running clash detections or simulations before build.
  • Iterating design options through BIM or VR environments.

5. Structural and Aesthetic Problem-Solving

  • Adjusting geometry or materials to meet performance or cost goals.
  • Redesigning to adapt to client changes, space constraints, or new codes.

If your team tests, models, or prototypes before finalizing a design, you’re likely performing qualifying R&D activities.

Common Misconceptions in Architecture and Design

  • “We don’t do research; we do design.”
    → The credit applies to any design process involving experimentation or technical evaluation.
  • “We’re not inventing anything.”
    → Incremental improvements (stronger, greener, or more efficient buildings) qualify.
  • “We just use existing software.”
    → Customizing, integrating, or programming software for project-specific needs often qualifies.
  • “We can’t prove what we tested.”
    → Reasonable project documentation (drawings, models, emails, etc) can be enough.

What Expenses Qualify

Architecture and design firms can include several categories of expenses in their R&D claim:

  • Employee wages for architects, engineers, and designers directly engaged in experimentation.
  • Software and modeling tools (CAD, BIM, simulation programs).
  • Prototyping materials used in model testing.
  • Contractor costs for third-party testing, modeling, or simulations.

Each expense must link to qualifying research activities, but specialists like B10 Capital help firms track this efficiently without interrupting workflow.

Documentation That Works

Architectural firms often assume they don’t have “R&D paperwork,” but most already keep what’s needed:

  • Design drawings and digital models showing iterations.
  • Simulation reports and material test data.
  • Meeting notes documenting alternatives or testing.
  • Timesheets or project allocations for technical staff.

The Financial Value

Architecture and design firms typically qualify for credits ranging from $50,000 to several hundred thousand dollars annually, depending on project size and scope.

Key benefits include:

  • Dollar-for-dollar reduction in federal (and often state) tax liability.
  • Retroactive claims that can look back up to three years to recover missed credits.
  • Improved cash flow for hiring, technology, and training.

Why CPAs Often Overlook Architectural Firms

Many CPAs assume architecture is “creative,” not “technical.” But the IRS recognizes architecture as a technical discipline grounded in physics, math, and engineering principles.
Without industry insight, traditional advisors often:

  • Understate qualifying activities.
  • Exclude design iteration or modeling phases.
  • Miss credits tied to software or sustainability testing.

That’s why partnering with a specialist who understands architectural workflows leads to larger, more accurate, and fully compliant claims.

State-Level Opportunities

Some states offer R&D incentives that align with the federal credit.
For architectural and design firms operating across multiple states, these can be claimed in tandem for additional savings.

B10 Capital monitors and manages both federal and state-level credits to ensure firms receive the maximum benefit available.

How B10 Capital Supports Architecture and Design Firms

We specialize in helping design professionals turn innovation into value, offering:

  1. Industry-specific expertise in architecture, engineering, and construction.
  2. Streamlined data collection from existing project files.
  3. Defensible documentation that aligns with IRS and state guidelines.
  4. CPA collaboration for seamless filing and compliance.

Our goal: make the R&D process simple, secure, and profitable, so you can focus on designing, not deciphering tax code.

Final Thoughts

Architecture and design are inherently experimental disciplines. Every tested material, simulated model, and reimagined space reflects research and development in action.

By identifying qualifying activities, maintaining straightforward documentation, and working with the right specialists, architectural firms can turn innovation into tangible financial return through the R&D tax credit.

If your firm models, tests, or engineers new building concepts, you’re likely already conducting qualifying R&D. Don’t let those efforts go unrewarded.

Contact B10 Capital today to explore R&D tax credit opportunities for architecture and design firms. Our team will help you capture every eligible dollar, federally and at the state level, while ensuring total compliance.

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