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