R&D Tax Credits in Delaware

Can I Claim R&D Tax Credits in Delaware?

Yes, you can claim R&D tax credits in Delaware. The state offers a research and development tax credit program known as the Delaware Research and Development Tax Credit.


The Research and Development Tax Credit (R&D) is a tax credit available to businesses of all sizes engaged in R&D activities within the United States. This credit is applicable to a diverse array of businesses and industries, extending well beyond traditional scientists and research laboratories. The R&D tax credit was introduced to encourage research and development efforts in the United States. It has become increasingly popular among companies who see the value in this incentive. Furthermore, the Protecting Americans from Tax Hikes (PATH) Act in 2015 made the R&D tax credits permanent and expanded the benefits to include startups.

What are the Potential Benefits of the R&D Tax Credit?

R&D tax credits from eligible companies can lead to substantial savings. These benefits include:

  • Increasing Cash Flow
  • Federal and State Dollar-for-Dollar Income Tax Reduction
  • Claim Credits for Open Tax Years Going Back 3-4 Years
  • Reducing Your Tax Rate


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Who Can Claim the R&D Tax Credit?

The misconception that R&D tax credits are limited to scientists and groundbreaking products is misleading. In reality, these credits have a much broader scope and impact than commonly believed.

Many companies, regardless of size or industry, are eligible for Research and Development (R&D) Tax Credits from the federal government. However, a large number of these companies are unaware of their eligibility. This means they are missing out on significant financial benefits from both federal and state R&D tax credits.

The activities that are eligible for the R&D tax credit are also the activities that are fueling the growth of your business.

  • Developed new products
  • Improved existing products
  • Developed software for internal or external use
  • Improved manufacturing processes

The activities that qualify for the Delaware R&D tax credit are the same ones driving growth in your business.

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How Do I Claim the R&D Tax Credit?

Companies can potentially claim 7-10% of their qualified expenses as a federal R&D tax credit. Take the example of a software developer, engineer, or lab technician earning $100,000 a year. They could save up to $10,000 in taxes.

Expenses eligible for research activities in your company usually encompass employee wages, materials, and contracted services. Adequate documentation, such as payroll records, financial records demonstrating supply or contract research expenses, and vendor invoices, can be used to substantiate your qualified expenses.