Have engineers and architects been exempted from the "service business" definition in the new tax code?

Have engineers and architects been exempted from the "service business" definition in the new tax code?

by Stephen F. Mankowski, CPA | Feb 01, 2018
askacpaicon

Have engineers and architects been exempted from the definition of "service business" in the new tax code? And if so, can they apply for S corporation status?

Based upon my research into the Tax Cuts and Jobs Act, here is my understanding to date:

  • Yes, engineers and architects are “exempted” from the classification of a service business provided they are performing work for construction projects.
  • Provided that the entity meets the basic requirements of an S corporation, there does not appear to be any reason that would prevent someone in these or other businesses from electing S status for taxes.

For more resources, check out PICPA’s Money & Life Tips, Ask a CPA, or CPA Locator.

Answered by: Stephen F. Mankowski, CPA, is president and CEO of Mankowski Associates CPA LLC in Chalfont, Pa.

Disclaimer
The responses are based on the limited information provided by the questioner and apply the laws and regulations at the time of posting. Other options could arise as rules and regulations may change over time, including but not limited to the passage of the Tax Cuts and Jobs Act of 2017. They are intended to provide general information, not specific accounting or tax advice; they are not intended or written to be used and cannot be used for the purpose of avoiding or evading taxes or penalties under the IRS code or regulations. Views expressed do not imply an opinion of the PICPA, its officers, directors, employees, or members.
Financial FAQs

Search the most frequently asked finance and accounting questions and read the responses from PICPA members. Always consult a CPA before taking action.

Search