Delaware State Tax Credits

More ways to save your hard-earned money from the tax man!

Delaware has some great Tax credits you can use....

Thank you so much for checking our resource out here for your state and congratulations for taking a proactive step to paying less in taxes. For your state, we have identified the tax credits that are currently being offered to help you pay less in state taxes.

We hope this resource is helpful to you, and if there is something you feel we have missed, please let us know!

It would be completely arrogant of us to think that we know all things and if we missed something we want to know so we can vet that and help you and our other friends in the entrepreneurial community pay less in taxes! And if you found this helpful, you should check out our DIY resources inside of our Tax Savings Communities (found at www.MakeTaxesFair.com/Our-Communities).

We're also ready to help you if you want to skip the line of the DIY process and get help directly from us. To learn more about how we help our clients check out www.MakeTaxesFair.com/Get-My-Roadmap

 
Delaware

New Business Facility Tax Credit

Overview:
Delaware’s New Business Facility Tax Credit incentivizes startups and expanding businesses to invest in new facilities and create jobs within the state. The program offers tax credits based on both the number of new full-time employees and the level of capital investment.

Who It’s For:
Businesses establishing or expanding a physical presence in Delaware that are committed to hiring new full-time employees and making significant capital investments.

Four Key Highlights:

  1. Two-Part Credit Structure

    • $500 per new full-time employee created.

    • $500 per $100,000 of qualified capital investment in the new facility.

  2. Minimum Thresholds to Qualify

    • Must create at least five new full-time jobs.

    • Must invest at least $200,000 in a qualified Delaware facility.

  3. Physical Presence Required

    • The business must maintain a physical location in Delaware to be eligible for the credit.

  4. Straightforward Application Process

    • Submit an application through the Delaware Division of Revenue using Form 402AP, including necessary supporting documentation.

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Delaware New Economy Jobs Program Tax Credit

Overview:
Delaware’s New Economy Jobs Program Tax Credit incentivizes the creation or retention of high-wage, knowledge-based jobs in the state. Qualified employers can claim a percentage of their employee state income tax withholding as a credit, with additional bonuses for businesses located in targeted areas.

Who It’s For:
Certified employers in Delaware creating at least 50 new high-paying jobs or retaining at least 200 vital jobs, with a focus on high-salary, knowledge-based roles.

Four Key Highlights:

  1. Substantial Credit Based on Employee Withholding

    • Base credit: 25% of withholding payments for eligible jobs.

    • Additional increases based on number of new or retained jobs, plus bonuses up to 10% for businesses in special zones.

  2. High Salary Thresholds Required

    • New jobs must meet a minimum salary of $112,200 (subject to adjustments).

    • Retained jobs must average at least $70,000 per year.

  3. Strict Eligibility and Compliance Rules

    • No double-dipping with other job creation credits.

    • Businesses must maintain job levels for at least two consecutive years or lose eligibility.

  4. Refundable and Highly Incentivized

    • Unused credits can be refunded.

    • Maximum total credit per employer: 65% of total qualified withholding payments.

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Delaware Business Finder’s Fee Tax Credit

Overview:
The Delaware Business Finder’s Fee Tax Credit rewards Delaware-based companies for successfully recruiting out-of-state businesses to relocate to Delaware, helping drive job creation and economic development. Both the sponsor firm and the relocating business can earn tax credits for each new full-time employee hired.

Who It’s For:
Delaware businesses (sponsor firms) that recruit eligible out-of-state businesses to relocate, as well as the new relocating businesses themselves, provided they meet the employment and relocation requirements.

Four Key Highlights:

  1. $500 Per New Full-Time Employee

    • Both the sponsor firm and the new business can claim $500 per qualifying full-time Delaware employee, applicable for three tax years after certification.

  2. Strict Eligibility Rules for Both Firms

    • Sponsor firms must be operating in Delaware for at least three years.

    • New businesses must have no prior Delaware presence for three years and relocate due to the sponsor firm’s efforts.

  3. Joint Application and Certification Process

    • Sponsor firms and new businesses must submit a joint application to the Delaware Division of Small Business with evidence of recruitment and job creation.

  4. First-Come, First-Served with $3M Annual Cap

    • Credits are awarded chronologically until the $3 million fiscal year cap is reached.

    • Unused credit approvals roll over to the next year in priority order.

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Delaware Neighborhood Assistance Tax Credit

Overview:
The Delaware Neighborhood Assistance Tax Credit offers individuals and businesses a tax incentive for making approved contributions to nonprofit neighborhood organizations that support community services, job training, economic development, education, housing, and crime prevention in low-income or distressed areas.

Who It’s For:
Individuals and businesses in Delaware that donate to approved nonprofit 501(c)(3) neighborhood organizations working in impoverished areas or supporting low- and moderate-income families.

Four Key Highlights:

  1. 50% Credit for Approved Contributions

    • Donors receive a 50% state income tax credit on the amount contributed to eligible programs, capped at $50,000 per year and $100,000 over three years.

  2. Broad Range of Eligible Activities

    • Contributions can support community services, education, economic development, housing, crime prevention, and job training initiatives.

  3. Mandatory Pre-Approval by DSHA

    • Contributions must be approved by the Delaware State Housing Authority (DSHA) before making a donation to qualify for the credit.

  4. Five-Year Carryforward Option

    • If the full credit isn’t used in the year earned, unused credits can be carried forward for up to five years.

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