Delaware R&D Tax Credit Explained for Businesses

Delaware and the R&D Tax Credit

State Credit Name: Credit for Research and Development Expenses

Expiration Date: Indefinite.

Who Can Apply? Corporations and flow-through entities

Credit Carry Forward: Unused R&D credits can be carried forward for 15 years. No carry back.

About the Credit: The total credit may not exceed 50% of the taxpayer’s tax due in any one taxable year. The credit is refundable.

Are you eligible?

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Special Notes: Small businesses and start-ups with revenue less than $20 million are eligible for a credit equal to:

20% of the excess of the taxpayer’s total Delaware QRE’s for the taxable year over the taxpayer’s Delaware base amount; or
100% of Delaware’s apportioned share of the taxpayer’s federal R&D tax credit, calculated using the alternative simplified credit method.

The taxpayer may calculate the credit in one of two ways:

10% of the excess of the taxpayer’s total Delaware QRE’s for the taxable year over the taxpayer’s Delaware base amount; or
50% of Delaware’s appointed share of the taxpayer’s federal R&D tax credit, calculated using the alternative simplified credit method.

Find out more

Swanson Reed is one of the only companies in the United States to exclusively focus on R&D tax credit preparation. Swanson Reed’s office location at 3616 Kirkwood Hwy, Wilmington, Delaware provides R&D tax credit consulting and advisory services to Wilmington, Dover, Newark, Middletown and Smyrna.

If you have any questions or need further assistance, please call or email our local Delaware Partner on (302) 342-0410.
Feel free to book a quick teleconference with one of our Delaware R&D tax credit specialists at a time that is convenient for you. Click here for more information about R&D tax credit management and implementation.

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Delaware R&D Tax Credit Filing Instructions

To claim the Research and Development (R&D) tax credit in Delaware, eligible taxpayers must apply to the Division of Revenue. This is done by submitting Form 2070AC, Application and Computation Schedule for Claiming Delaware Research and Development Tax Credits. This form must be filed by September 15th after the end of the taxable year in which the R&D expenses were incurred. It’s crucial to attach a copy of the federal research credit Form 6765 to this application, as Delaware’s credit calculation is often tied to the federal R&D credit. Once the credit is approved by the Delaware Division of Revenue, the amount from Form 2070AC must be transferred to the relevant line on Delaware Form 700, Delaware Income Tax Credit Schedule, and both forms should be attached to the taxpayer’s annual Delaware corporation income tax return.