Research and Development Tax Credit: Building System Controls

By January 11, 2018 April 20th, 2018 R&D Tax Credits
Companies that build system controls are strong contenders for the Research and Development (R&D) Tax Credit. These companies conduct daily qualifying research activities (QRAs) when they design, develop or improve their system controls. Additionally, they invest in extensive amounts of qualifying research expenses (QREs), such as the salaries of employees or outside contractors conducting qualifying services and the purchase of any supplies needed to further their R&D efforts.

Besides conducting QRAs, these activities have to pass the IRS Four-Part Test threshold. The IRS Four-Part Test requires: a new or improved business component (product, process, technique, invention, formula or software), the business component should be technological in nature, some kind of elimination of uncertainty, and a process of experimentation. The list below illustrates several examples of activities that fulfill the IRS Four-Part Test:

  • Developing and improving new or existing control systems.
  • Wiring design and layout installation for the control systems.
  • Programming and testing control systems.
  • Testing to meet regulatory requirements such as balance, acoustics and false loading.
If your company conducts activities within the system control industry there is a strong likelihood that your company can take advantage of the R&D Tax Incentive. To learn more about the Research and Development Tax Credit visit the Indago website or email us at