Delaware · research and development · DE-RD-001
Research and Development Tax Credit
Publication revised September 24, 2026. Sourcebook page 74.
Credit amount / calculation
Regular method: 10% of Delaware research expenses above the base, or 20% for a qualifying small business. Alternatively, use 50% (100% for a qualifying small business) of the apportioned federal simplified credit.
Business fit and eligible activity
Qualified Delaware research can generate a state credit for a wood-products manufacturer. Qualified research activity. Ordinary production, routine quality control and an equipment purchase alone do not qualify.
Eligibility and practical use
For forest products, research credits usually live on the mill floor rather than in a laboratory. Scanner settings, drying schedules, process-control changes, product testing, and equipment modifications can matter when the work is experimental rather than routine. A logging company has a narrower path, but equipment-control, software, or process-development work can sometimes qualify if it satisfies the same technical tests.
Illustrative business benefit
An eligible small mill has $200,000 of accepted Delaware research expenses above the regular-method base. Its credit is $40,000 at 20%. If $15,000 offsets eligible tax, the remaining approved $25,000 is refundable.
Timing / first action
Tax-year claim: document the eligible expense, hire or placed-in-service date and meet any separate certification deadline. Identify the technical uncertainty and start contemporaneous project records before trying to calculate the credit.
Official sources
- delcode.delaware.gov — Delaware Code Online (delcode.delaware.gov)
Related programs
Blue Collar Jobs Act Credits
$500 per qualifying employee plus $500 per $100
Qualified manufacturing expansions creating jobs and facility investment can receive state credits after approval.
Clean Electricity Investment Credit (Internal Revenue Code §48E)
Generally
Potentially relevant when a forest-products facility owns qualifying zero-emission generation or energy-storage property.
Credit for Increasing Research Activities (Internal Revenue Code §41)
Regular research-credit method
A sawmill, secondary manufacturer or biomass business can qualify when it performs genuine technological experimentation to improve a product or process.
Rehabilitation Credit (Internal Revenue Code §47)
Generally
A forest-products company rehabilitating a certified historic mill or industrial building for income-producing use may qualify.