Delaware's R&D credit is refundable, but it follows where research happens.

Rate	10% of increase, or 50% of apportioned federal credit
Refundable	Yes (fully refundable)
Statute	30 Del. C. 2070-2073
Form	BUS-RDC, filed and approved by September 15

The credit is the federal research credit, narrowed to Delaware, with a choice of two methods. The mechanics:

• Two methods, you elect. Either 10 percent of the excess of your Delaware qualified research expenses over a Delaware base amount, or 50 percent of Delaware's apportioned share of your federal credit computed under the alternative simplified credit method of IRC Section 41(c)(4).
• Double for small businesses. A small business substitutes 20 percent for 10 percent and 100 percent for 50 percent. Small business means average annual gross receipts under an indexed threshold: $26,071,000 for 2025 and $26,767,000 for 2026 (originally $20 million).
• It is refundable. If you cannot use the full credit against tax, the unused amount is paid to you as a refund under 30 Del. C. 2070(c). There is no statewide cap or proration: sections 2074 and 2075, which set the old cap, were repealed effective January 1, 2017.
• Delaware-only, not incorporation. The credit is for research conducted in Delaware. A company incorporated in Delaware whose engineers work elsewhere claims the credit in the state where the research actually happens, not in Delaware.
• Same expense definition as federal. Qualified research expenses follow IRC Section 41: wages for qualified services, supplies, and contract research, limited to the Delaware-performed portion.

The credit is requested on Form BUS-RDC, which must be filed with and approved by the Delaware Division of Revenue by September 15 after the tax year ends. Build that date into your timeline, because the request is a separate step from the return.

R&D Binder produces federal Section 41 documentation from your GitHub commit history. The binder is what supports your federal Form 6765 and, starting tax year 2026, the Form 6765 Section G appendix (mandatory for non-exempt filers). Because Delaware uses the same Section 41 expense definition, that same evidence supports the Delaware credit for the portion of the work conducted in Delaware.

The Delaware state credit workpaper is a $995 add-on to the standard binder engagement. It produces:

• A Delaware-attributable QRE breakdown: wages, supplies, and contractor expenses tied to research conducted in Delaware, using the same business-component partition as the federal binder.
• Both calculation methods worked out, so your CPA can elect the larger: the 10 percent (or 20 percent) excess-over-base method and the 50 percent (or 100 percent) federal-apportioned method.
• A refund note: that the credit is refundable, with the amount available as cash if it exceeds your Delaware tax.
• Filing notes for your CPA: that the credit is requested on Form BUS-RDC and a reminder that it must be filed and approved by September 15 after the tax year ends.

We do not file Form BUS-RDC or sign the Delaware return. That stays with your CPA, the same way federal Form 6765 does. R&D Binder produces the workpaper; your CPA files.

If you operate in more than one state, additional state workpapers are $995 each. Most states with an R&D credit track the federal QRE definition closely, so the marginal cost per state is low once the federal binder is complete.

A worked example. A Wilmington SaaS company with 12 engineers, $2.4M in qualifying wages (the federal QRE pool), and 9 engineers actually doing their research in Delaware. With average annual receipts under $26 million, below the $26,071,000 threshold for 2025, it is a small business for this credit.

• Federal Section 41 credit. Computed on the full $2.4M federal QRE pool through Form 6765, claimed by the CPA. R&D Binder produces the binder, QRE workpaper, and Form 6765 Section G appendix.
• Delaware credit, method one. Allocate roughly $1.8M to Delaware ($2.4M times the 9/12 engineer ratio). Say the Delaware base is $900,000, so the excess is $900,000. At the small-business 20 percent rate, that is $180,000.
• Delaware credit, method two. 100 percent (small business) of Delaware's apportioned share of the federal credit. The CPA computes both and elects the larger.
• Refundable. Because the credit is refundable, a pre-profit company receives the credit as cash rather than carrying it forward. Total engagement cost: SaaS Standard tier ($4,995, 6 to 25 FTE) plus the Delaware state workpaper add-on ($995), or $5,990.

The base amount, the apportionment, and the method election are specific to each company; the numbers above are illustrative. The CPA files both returns. R&D Binder never appears on the federal or Delaware return.

If the Delaware Division of Revenue examines a return on which the research credit was claimed, the substantiation expected is the same kind the IRS expects under federal Section 41: business-component identification, four-part-test rationale, contemporaneous evidence, and QRE allocation by employee, contractor, and supplies, plus support that the research was conducted in Delaware. The binder R&D Binder produces is built to that standard from the federal side, and the Delaware workpaper inherits the same business-component structure and adds the in-state allocation.

Our standard scope ends at delivering the binder and the state workpaper. Audit-defense engagement for a Delaware Division of Revenue examination is a separate scope at $250 per hour, scoped per incident. We do not represent before the Division; that remains your CPA's responsibility or your tax controversy attorney's.

• 30 Del. C. sections 2070 to 2073 (Research and Development Tax Credit), the 10 percent and 50 percent calculation methods, the doubled 20 percent and 100 percent small-business rates, the gross-receipts threshold, and the provision in 2070(c) that unused credit is paid as a refund. Delaware Code Online, Title 30 Chapter 20 Subchapter VIII.
• Delaware Division of Revenue, Form BUS-RDC instructions, for the request process, the small-business threshold, and the requirement that BUS-RDC be filed and approved by September 15 after the tax year ends.
• Delaware Division of Revenue, Annual Threshold Adjustment Factor for CY26, for the indexed small-business threshold of $26,071,000 for 2025 and $26,767,000 for 2026.
• 30 Del. C. sections 2074 and 2075, repealed effective January 1, 2017, which ended the statewide cap and proration for tax periods after 2016. Delaware Code Online, Title 30 Chapter 20 Subchapter VIII.
• IRS Form 6765 (federal Credit for Increasing Research Activities) and Internal Revenue Code Section 41, the federal definition Delaware incorporates, including the alternative simplified credit method.

This page is general informational content, not tax advice for any specific taxpayer. The Delaware credit is administered by the Delaware Division of Revenue. The rates, the small-business threshold, the refundable treatment, and the request process reflect 30 Del. C. sections 2070 to 2073 and Division of Revenue guidance as of September 2026. Confirm current figures and the filing deadline with your CPA or the Division before filing.

• Delaware R&D credit rate
• Delaware vs the federal credit
• Delaware R&D credit refund
• The Section 41 four-part test
• What is a qualified research expense (QRE)?
• Form 6765 and Section G
• Connecticut R&D credit
• Iowa R&D credit
• Maryland R&D credit
• Michigan R&D credit