Delaware Tax Credits - Delaware Research and Development - Application and Computation Schedule

Tax Credits - Delaware Research and Development - Application and Computation Schedule
Form 2071AC 0007
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STATE OF DELAWARE

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FORM 2071AC 0007

APPLICATION AND COMPUTATION SCHEDULE FOR CLAIMING
DELAWARE RESEARCH AND DEVELOPMENT TAX CREDITS

DIVISION OF REVENUE
820 North French St.
P.O. Box 8763
Wilm. DE 19899-8911

FORM 2071AC MUST BE COMPLETED AND SUBMITTED ON OR BEFORE SEPTEMBER 15TH AFTER THE END
OF THE TAXABLE YEAR DURING WHICH THE QUALIFIED RESEARCH & DEVELOPMENT EXPENSES WERE MADE.

PART 1 - NAME AND ADDRESS 							
1.												
TAX PERIOD ENDING DATE
or
Federal Employer Identification Number

Social Security Number

2. Name of Taxpayer:
3. Address:								State: 		 Zip Code:
4. Delaware Address (if different from above):			
State:	 	
Zip Code:

5.

Contact Person 		

Telephone Number 		

Fax Number 			

E-mail Address

PART B – DELAWARE RESEARCH & DEVELOPMENT ELECTION AND COMPUTATION
SELECT A METHOD TO COMPUTE THE DELAWARERE SEARCH& DEVELOPMENT CREDIT. ONLY ONE METHOD MAY BE SELECTED
TO COMPUTE THE CREDIT. THE METHOD USED TO COMPUTE THE DELAWARE RESEARCH & DEVELOPMENT CREDIT IS AN ANNUAL
ELECTION. THE ELECTION IS INDEPENDENT OF THE METHOD USED TO COMPUTE THE FEDERAL RESEARCH & DEVELOPMENT CREDIT.
PLEASE ATTACH A COPY OF FEDERAL FORM 6765 TO THIS APPLICATION. IF A CONSOLIDATED CORPORATE INCOME TAX RETURN IS
FILED, PLEASE ATTACH A PROFORMA FORM 6765 FOR THE CORPORATE APPLICANT.

Method A - Ten percent of the excess of the taxpayer’s total Delaware qualified research and developement 		
		
expenses for the taxable year over the taxpayer’s Delaware base amount.
1.	
2.	
3.	
4.	
5.	
6.	
7.	
8.	
9.	
10.	
	
	
1.	
2.	
3.	
4. 	
5. 	
6. 	

Total Delaware qualified R&D expenses for the 4 years preceding the credit year ......................
Total Delaware gross receipts for the 4 years preceding the credit year ......................................
Delaware Fixed Based Percentage. Divide Line 1 by Line 2 ........................................................
Average annual gross receipts for the 4 years preceding the credit year .....................................
Delaware Base Amount. Multiply Line 3 by Line 4 ........................................................................
Total Delaware qualified R&D expenses for the credit year ..........................................................
Subtract Line 5 from Line 6 ...........................................................................................................
Multiply Line 6 by 50% ..................................................................................................................
Enter the smaller of Line 7 or Line 8 .............................................................................................
Delaware R&D Credit. Multiply Line 9 by 10% ..............................................................................

$
$
%
$
$
$
$
$
$
$

Method B - Fifty percent of Delaware’s apportioned share of taxpayer’s federal research and development tax credit 	
calculated usign the alternative incremental credit method under Section 41(c)(4) of the Internal Revenue 	
Code of 1986, using federal definitions and methodology.
Federal Alternative Incremental Credit from Line 39, Federal Form 6765 .................................... $
Delaware qualified R&D expenses for the credit year .................................................................. $
Total qualified R&D expenses for the credit year .......................................................................... $
Divide Line 2 by Line 3 .................................................................................................................	
%
Multiply Line1 by Line 4 ................................................................................................................ $
Delaware R&D Credit. Multiply Line 5 by 50% ............................................................................ $

STOP: IF THE BUSINESS ENTITY FOR WHICH THE CREDIT HAS BEEN APPROVED IS:
•	
•	
	
•	
	
•	

C CORPORATION - Enter the Delaware R&D Credit on Form 700, Delaware Income Tax Credit Schedule, Line 10(a)
S CORPORATION - Multiply the Delaware R&D Credit by the percentage of stock owned by each shareholder. Enter the result on Form 	
700 Delaware Income Tax Credit Schedule, Line 10(b).
PARTNERSHIP - Multiply the Delaware R&D Credit by the percentage ownership of each partner. Enter the result on Form 700, Delaware 	
Income Tax Credit Schedule, Line 10(c).
INDIVIDUAL& SOLE PROPRIETOR - Enter the Delaware R&D Credit on Form 700, Delaware Income Tax Credit Schedule, Line 10(d).

	

NAME
(Rev 07/2017)

TITLE

DATE

*DF70017019999*
DF70017019999

		

GENERAL INSTRUCTIONS FOR COMPLETION OF
FORM 2071AC 0007
The Delaware Division of Revenue must first approve any taxpayer electing to qualify for the Delaware Research & Development
Tax Credits. After receiving tax credit approval from the Delaware Division of Revenue, 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. If you need assistance completing this
form, please contact DE Division of Revenue, 820 N. French Street, Wilmington, DE 19801, email at
[email protected] .

SPECIFIC INSTRUCTIONSSelect a method to compute the Delaware research & development credit. Only one method
may be selected to compute the credit. Please attach a copy of federal form 6765 to this application. If a consolidated
corporate income tax return is filed, please attach a proforma federal form 6765 for the corporate applicant.

METHOD A – Ten Percent Of The Excess Of The Taxpayer’s Total Delaware Qualified Research & Development
Expenses For The Taxable Year Over The Taxpayer’s Delaware Base Amount.
Line 1.	

Enter the total Delaware qualified research & development expenses for the four years immediately preceding
the credit year.
Line 2.	 Enter the total Delaware gross receipts for the four years immediately preceding the credit year.
Line 3.	 Divide Line 1 by Line 2. This is the Delaware Fixed Base Percentage.
Line 4.	 Enter the average annual gross receipts for the four years immediately preceding the credit year.
Line 5.	 Multiply Line 3 by Line 4. This is the Delaware Base Amount.
Line 6.	 Enter the total Delaware qualified research & development expenses for the credit year.
Line 7.	 Subtract Line 5 from Line 6. If the result is zero or less, enter zero.
Line 8.	 Multiply Line 6 by 50%.
Line 9.	 Enter the smaller of Line 7 or Line 8.
Line 10.	 This is your Delaware Research & Development Credit. Multiply Line 9 by 10%.
METHOD B – Fifty Percent Of Delaware’s Apportioned Share Of Taxpayer’s Federal Research & Development Tax
Credit Calculated Using The Alternative Incremental Credit Method Under Section 41(C)(4) Of The Internal Revenue
Code Of 1986, Using Federal Definitions And Methodology.
Line 1.
Line 2.
Line 3.
Line 4.
Line 5.
Line 6.	

Enter the Federal Alternative Incremental Credit from Line 39, Federal Form 6765.
Enter the Delaware qualified research & development expenses for the credit year.
Enter all qualified research & development expenses for the credit year.
Divide Line 2 by Line 3.
Multiply Line 1 by Line 4.
This is your Delaware Research & Development Credit. Multiply Line 5 by 50%.

STOP: IF THE BUSINESS ENTITY FOR WHICH THE CREDIT HAS BEEN APPROVED IS:

• C CORPORATION – Enter the Delaware R&D Credit on Form 700, Delaware Income Tax Credit Schedule, Line 10(a).
• S CORPORATION – Multiply the Delaware R&D Credit by the percentage of stock owned by each shareholder. Enter the
result on Form 700, Delaware Income Tax Credit Schedule, Line 10(b).

• PARTNERSHIP – Multiply the Delaware R&D Credit by the percentage ownership of each partner. Enter the result on
Form 700, Delaware Income Tax Credit Schedule, Line 10(c).

• INDIVIDUAL & SOLE PROPRIETOR – Enter the Delaware R&D Credit on Form 700, Delaware Income Tax Credit
Schedule, Line 10(d).

As of Jauary 1, 2017 the Research & Development Tax Credit has changed. After January 1, 2017, there is no longer a
$5,000,000 cap on total tax credits issued by the State of Delaware and the R&D Tax Credits are now refundable.