- Delaware Division of Revenue (DOR) – State agency managing Delaware tax administration.
- Del. Code Ann. tit. 30, § 2070-2075 – Laws governing Delaware research and development tax credits.
- Credit for Research and Development Expenses – Tax incentive for qualified R&D spending in Delaware.
- Taxpayer’s Delaware Base Amount – Historical R&D spending level used for calculation.
- Total Delaware Qualified Research and Development Expenses – Sum of eligible R&D costs incurred in Delaware.
- Excess Delaware Qualified Research Expenses – Current R&D spending exceeding the base amount.
- 10% Credit Rate (General Rule) – Standard percentage applied to excess research expenses.
- 20% Credit Rate (Small Business Alternative) – Higher credit rate for qualifying small businesses.
- Small Business Definition ($20M Gross Receipts) – Businesses with average receipts under $20 million.
- Average Annual Gross Receipts (Delaware) – Revenue average calculating small business eligibility.
- Delaware Apportioned Share – Portion of federal credit allocated to Delaware.
- Federal Research and Development Tax Credit – Federal tax incentive linked to Delaware’s calculation.
- Alternative Simplified Credit (ASC) Method – Optional calculation method using recent expense averages.
- Delaware’s Apportioned Share of Federal ASC – State credit based on federal ASC method.
- 50% Apportionment Rate (General Rule ASC) – Standard allocation of federal ASC to Delaware.
- 100% Apportionment Rate (Small Business ASC) – Full allocation of federal ASC for small businesses.
- Annual Election (Delaware Credit Calculation) – Yearly choice between standard or alternative credit methods.
- Independent Election (of Federal Method) – State method choice independent of federal election.
- Fully Refundable Credit – Unused credits paid out as cash refund.
- Unused Credit Refund (Cash Payment) – Payment received if credit exceeds tax liability.
- Qualified Tax Liability – Tax amount against which the credit is applied.
- Corporate Income Tax (Offset) – Tax type reduced by the R&D credit.
- Partnership Allocation (§ 41(f)(2)(B)) – Distributing credits among partners based on ownership.
- S Corporation Pass-Through – Credits flow to shareholders’ personal tax returns.
- LLC Tax Treatment (Pass-Through) – LLC members claim credits on individual returns.
- Form 2070AC (Application and Computation Schedule) – Form to calculate and claim Delaware R&D credit.
- Filing Deadline (September 15th) – Due date for Delaware R&D credit applications.
- Federal Form 6765 (Required Attachment) – Federal R&D form required for state filing.
- Form 700 (Delaware Income Tax Credit Schedule) – Summary form listing all claimed Delaware credits.
- Qualified Research Expenses (QREs) – Costs eligible for the research tax credit.
- Research Conducted in Delaware – R&D activities physically performed within Delaware.
- Wages for Qualified Services (Delaware) – Pay for employees doing qualified research in Delaware.
- Supplies Used in Qualified Research (Delaware) – Materials consumed during Delaware R&D activities.
- Contract Research Expenses (Delaware) – Payments to third parties for Delaware research.
- IRC § 41 (Federal Definitions) – Federal tax code defining qualified research.
- Technological in Nature (4-Part Test) – Research relying on hard sciences or engineering.
- Elimination of Uncertainty (4-Part Test) – Research intended to resolve technical design issues.
- Process of Experimentation (4-Part Test) – Evaluation of alternatives to achieve a result.
- Permitted Purpose (4-Part Test) – Research for new or improved business components.
- Prior Year’s Expenditures (Base Amount Calculation) – Historical spending data used to set baseline.
- Delaware Fixed-Base Percentage – Ratio of historic R&D to gross receipts.
- Gross Receipts for the 4 Preceding Years – Revenue data used to calculate the base amount.
- Taxable Year – Fiscal period for which tax return is filed.
- Carryforward of Unused Credit – Applying excess credits to future tax years.
- Carryforward Period (15 Years) – Duration unused credits remain valid for use.
- Former Credit Cap ($5 Million Cap) – Old limit on maximum credit per taxpayer.
- Former Tax Liability Limit (50%) – Previous restriction on offsetting tax liability.
- Statute Section 2073 (Time Limitations) – Rules regarding deadlines for credit claims.
- Apportionment Rules (Corporate) – Methods for dividing income/credits among states.
