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The state of Delaware offers a research credit that is calculated under similar requirements as IRC § 41. Until 2019, Delaware had a $5 million expenditure cap for R&D tax credits. That cap has been eliminated, which means that companies receive 100 percent of the expected credit. In addition, the tax credit is now refundable.
The Delaware credit offers two computation methods:
The Delaware Division of Revenue (DOR) must first approve any taxpayer electing to qualify for the Delaware Research & Development Tax Credits. After receiving tax credit approval from the Delaware DOR, the amount of approved credit on Delaware Form 2071AC must be transferred to the appropriate line on Delaware Form 700. Delaware Forms 700 and 2071AC must be attached to each annual income tax return approved for the credit.
Delaware is the only state in the country that combines a zero-expenditure cap with a refundable tax credit.
Learn more about Delaware's R&D Tax Credit law here.
R&D Tax Credit Available:
C-Corporations, S-Corporations, LLCs, Partnerships
Deadline for Tax Filing:
Application due by September 15th
Data Required to Compute Credit:
Claim Period Qualified R&D Expenses (QREs)
What Information is needed?
QREs for Prior 4 Years
Gross Receipts for Prior 4 Years
Refundable Credit of any credits that exceed tax liability.