If you’re a tax consultant working with companies across different industries, you already know this: the R&D tax credit isn’t one-size-fits-all. Whether your client is a scrappy SaaS startup or a legacy engineering firm, the way you identify, document, and maximize Qualified Research Activities (QRAs) will look very different. And in 2025, with the IRS tightening compliance expectations, using R&D tax credit software isn’t just helpful – it’s essential for staying efficient, audit-ready, and capturing every eligible dollar.
In this guide, we’ll break down industry-specific R&D tax credit tips that every consultant should have in their toolkit. From engineering to software to manufacturing and beyond, we’ll show you how to avoid the common pitfalls and help your clients win.
Table of Contents
1. Engineering & Architecture: Go Beyond the Obvious Projects
Engineering firms often focus their claims on big-ticket projects – bridges, highways, or complex systems. But the real opportunities? They’re often hidden in the smaller, iterative problem-solving your clients do every day.
Where to look for QRAs:
- Structural redesigns due to site constraints
- Evaluating alternative materials for durability or cost
- Developing custom solutions for clients with unique needs
Consultant Tip:
Don’t let clients overlook work done during the bidding, proposal, or feasibility stages. If technical uncertainty is present, it likely qualifies.
Watch for pitfalls:
- Overstating work done purely for aesthetics or routine design
- Failing to document iterations and field adjustments
Bonus:
Use R&D tax credit software to tag qualifying phases and track by job number – it makes audits a breeze.
2. Manufacturing: Focus on Process Improvements and Automation
Manufacturers often miss out on credits by only focusing on new product development. But process improvements are prime territory for R&D claims.
Where to look:
- Automating production lines
- Reducing waste or cycle times
- Developing tooling, molds, or fixtures
Consultant Tip:
Even if the product hasn’t changed, if your client modified the process to make it faster, cheaper, or more efficient – that counts.
Watch for pitfalls:
- Confusing trial production with routine production
- Missing documentation on machine programming, prototyping, or testing
Pro Move:
Capture operator notes, machine logs, and engineering change orders in your documentation package.
3. SaaS & Software: Clarify the Gray Areas
Software companies are gold mines for R&D credits – but they’re also magnets for IRS scrutiny. The key is clearly distinguishing qualified technical work from routine maintenance or cosmetic updates.
Where to look:
- Developing new algorithms, data models, or integrations
- Building scalable architecture
- Solving for performance, reliability, or security challenges
Consultant Tip:
Make friends with your clients’ dev teams. Ask about what’s keeping them up at night – that’s where the uncertainty (and the credits) live.
Watch for pitfalls:
- Overstating UI/UX design or front-end changes without technical uncertainty
- Failing to segment qualifying vs. non-qualifying sprints
Power move:
Integrate with project management tools like Jira, and use R&D tax credit software to auto-tag qualifying tasks.
4. Biotech & Life Sciences: Don’t Forget the Supporting Activities
In biotech and life sciences, the obvious QRAs are in the lab. But many consultants miss supporting activities like data analysis, compliance-driven experiments, or pilot manufacturing.
Where to look:
- Formulation trials
- Clinical data collection and analysis
- Scale-up from bench to production
Consultant Tip:
Use careful documentation of regulatory trial phases, especially when activities are mandated by the FDA but still require experimentation.
Watch for pitfalls:
- Claiming activities beyond the qualified purpose (e.g., market studies)
- Overlooking cross-functional contributors (e.g., statisticians, data scientists)
Efficiency hack:
Use templates in your R&D tax credit software tailored for life sciences to ensure nothing gets missed.
5. Construction & Contracting: Debunk the Myth That Nothing Qualifies
Construction companies are notorious for thinking they don’t do R&D. Not true.
Where to look:
- Developing custom building systems or materials
- Adapting designs to extreme site conditions
- Prefabrication innovations
Consultant Tip:
Documenting these activities is often the biggest hurdle. Use job site photos, RFIs, and as-built drawings as supporting evidence.
Watch for pitfalls:
- Over-claiming work that’s purely standard construction methods
- Lack of clear technical uncertainty documentation
Smart move:
Create an R&D checklist per project phase to streamline review.
6. Cross-Industry Pro Tips Every Consultant Should Know
No matter the industry, these golden rules apply:
- Be proactive, not reactive. Build R&D identification into quarterly reviews, not year-end scrambles.
- Focus on collaboration. Don’t rely solely on finance. Engineers, product managers, and operators hold the gold.
- Train clients on the 4-part test—in plain English. This builds buy-in and better documentation
- Use R&D tax credit software that automates the heavy lifting. Manually chasing logs and reports? That’s so 2022.
7. What’s New in 2025? IRS Hot Buttons to Watch
With the IRS ramping up R&D enforcement this year, consultants need to be sharper than ever.
Hot buttons:
- Software development claims without clear technical documentation
- Overlapping domestic vs. foreign research (especially in SaaS)
- Boilerplate project descriptions recycled across tax years
The fix? Invest in better processes, better documentation, and better tools.
Final Thoughts: Make Industry-Specific R&D Consulting Your Edge
In 2025, the best R&D consultants aren’t just filing forms – they’re industry experts who understand the nuance, speak the client’s language, and know where to look for hidden credits.
And they’re using smart tools to do it.
Want to supercharge your R&D tax credit practice? TaxRobot makes it easy.
Our AI-powered software streamlines identification, documentation, and defense of R&D tax credits – whether you work with SaaS, biotech, engineering, or manufacturing.
Stop leaving credits on the table. Visit TaxRobot.com today and see how you can turn R&D into ROI—without the guesswork.