Tax Compliance Series for Construction Contractors: Domestic Production Activities Deduction

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Previous installments of Aronson’s Tax Compliance Series for Construction Contractors focused on methods of accounting, the lookback provision, and long-term contract adjustments. Today, we switch our focus to a fantastic opportunity to not only comply with IRS regulations, but benefit from a big tax deduction.

The Domestic Production Activities Deduction, created by the American Jobs Creation Act of 2004, is a gem! The deduction is equal to 9% of qualified production activities income (QPAI), limited to 50% of qualified W-2 wages paid for the year.

Qualified activities under this deduction include:

  • Residential and commercial construction
  • Infrastructure improvements
  • Land preparation activities
  • Architectural and engineering …read more

    Read more here:: Construction

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