State Program
Delaware Research and Development Tax Credit
A refundable state credit that follows the federal research credit calculation and may provide a cash refund to eligible companies with limited or no Delaware tax liability.
Program Overview
Delaware's research credit is based on the federal research credit attributable to qualified research conducted in Delaware. Taxpayers compute the credit as a percentage of the federal credit, with an enhanced rate available to qualifying small businesses. Applications are filed with the Delaware Division of Revenue after the federal return is completed, so the state claim follows the federal claim each year. Eligible taxpayers may receive a cash refund to the extent the credit exceeds their Delaware income tax liability, subject to applicable requirements.
Eligibility
- Taxpayers claiming a federal research credit for qualified research conducted in Delaware may qualify.
- Qualifying research activities must meet the applicable federal requirements for the research credit.
- Small businesses with gross receipts under $20 million may qualify for the enhanced rate, subject to applicable requirements.
- Applications must be filed with the Delaware Division of Revenue after the federal return is completed.
Benefits
- Provides a refundable Delaware research credit based on the federal research credit attributable to Delaware research.
- Qualifying small businesses may receive an enhanced credit rate.
- The credit may provide a cash refund when it exceeds the taxpayer's Delaware income tax liability, subject to applicable requirements and limitations.
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