Delaware R&D Tax Credit Services

No. Delaware's R&D credit is based on where qualifying research expenses are incurred, not where a company is incorporated. What matters is whether the research services were performed in Delaware.

Taxpayers choose between two methods. Method 1 applies 10% (or 20% for qualifying small businesses) to the amount by which Delaware QREs exceed the Delaware base amount. Method 2 applies 50% (or 100% for small businesses) to Delaware's apportioned share of the federal Alternative Simplified Credit. Small business status is determined by average annual gross receipts relative to the current inflation-indexed threshold under § 515(c)(1).

Partially. Under the post-2016 regime, if an approved credit exceeds your Delaware tax liability, the unused portion is refundable. This is a meaningful distinction from the pre-2017 regime, under which unused credits were carried forward for up to 15 years subject to a statewide cap.

Yes. Both credits can be claimed on the same qualifying Delaware-based expenses. Method 2 of the Delaware calculation ties directly to the federal ASC, so businesses that have already calculated their federal credit have a natural starting point for the state calculation.

Yes, but only for the portion attributable to services performed in Delaware. The Director reviews geographic allocation as part of the approval process, so contemporaneous records showing where research services were performed are essential.

If your approved credit exceeds your Delaware liability, the excess is refundable rather than lost. This makes the credit valuable even for businesses with limited near-term Delaware tax exposure.