© 2017 BRAYN Consulting LLC. All Rights Reserved. BRAYN Consulting LLC is a knowledge firm that supports CPA firms and their clients in obtaining R&D, Production & Construction incentives. Headquartered in the greater Los Angeles, California area, BRAYN is comprised of technical experts with decades of Big 4 and national tax consulting firm experience in the area of R&D, production, construction, energy, and growth incentives. THIS PRODUCT OR SERVICE HAS NOT BEEN APPROVED OR ENDORSED BY ANY GOVERNMENTAL AGENCY, AND THIS OFFER IS NOT BEING MADE BY AN AGENCY OF THE GOVERNMENT.

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  • Compiling and testing software codes
  • Unit, integration, functional, performance, and regression testing 

199 DPAD

IRC Section 199 Domestic Production Activities Deductions (DPAD) represents a valuable tax incentive for businesses that perform domestic architecture, engineering, and construction services.  Eligible engineering and architecture services include consultation, investigation, evaluation, planning, design and supervision of construction. Construction activities must be domestic and can include residential or commercial building improvements as well as infrastructure projects. Generally, the tax deduction can be as much as 9% of taxable income.

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Software Firm Case Study

ItemAverage Annual Amount
Gross Revenues$10,000,000
Total Payroll$1,850,000
Qualified Research Expenses (QREs)$1,250,000
Net Federal Credits$82,500
Net State Credits$37,000
Total Net Federal and State Credits$119,500

Other Incentives

  • Enterprise architecture
  • Flowcharting software logic
  • Programming software source code
  • Improving upon open-source software codes

Ready To Explore Your Incentives?

Examples of Qualified Activites

R&D for Software

Many owners, officers, and CPAs of software companies are unaware that they are eligible for valuable federal and state Research & Development (R&D) Tax Credits. However, due to the expansive definition of R&D for tax credit purposes, many of the software coding and testing, as well as version improvements, performed by software companies often qualify for such treatment.