Wisconsin R&D Tax Credit Summary

WISCONSIN R&D TAX CREDIT SUMMARY

Wisconsin State R&D Tax Credit

For taxable years beginning after December 31, 2014, a corporation may claim a research credit against the income/franchise tax, as allocated under Wis. Stat. §71.28(4)(d).

  • The credit is equal to 5.75% of the amount by which the corporation’s qualified research expenses for the taxable year exceed 50% of the average qualified research expenses for the three taxable years immediately preceding the taxable year for the credit is claimed
  • If the corporation had no qualified research expenses in any of the three taxable years immediately preceding the taxable year for which the credit is claimed, the claimant may claim an amount equal to 2.875% of the corporation’s qualified research expenses for the taxable year for which the credit is claimed
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    • “qualified research expenses” includes only expenses incurred by the claimant, incurred for research conducted in Wisconsin for the taxable year and does not include compensation used in computing the credit under Wis. Stat. §71.28(1dx) (development zones credit), the corporation’s base amount

    Refundable/Transferable Tax Credit – No

    Vehicle research credit

    • For taxable years beginning after December 31, 2014, a corporation may claim a research credit against the income/franchise tax, as allocated under Wis. Stat. §71.28(4)(d), equal to 11.5% of the amount by which the corporation’s qualified research expenses for the taxable year exceed 50% of the average qualified research expenses for the three taxable years immediately preceding the taxable year for which the credit is claimed
    • If the corporation had no qualified research expenses in any of the three taxable years immediately preceding the taxable year for which the credit is claimed, the claimant may claim an amount equal to 5.75% of the corporation’s qualified research expenses for the taxable year for which the credit is claimed

    Energy efficiency research credit

    • For taxable years beginning after December 31, 2014, a corporation may claim a credit against the income/franchise tax, as allocated under Wis. Stat. §71.28(4)(d), equal to 11.5% of the amount by which the corporation’s qualified research expenses for the taxable year exceed 50% of the average qualified research expenses for the three taxable years immediately preceding the taxable year for which the credit is claimed
    • If the corporation had no qualified research expenses in any of the three taxable years immediately preceding the taxable year for which the credit is claimed, the claimant may claim an amount equal to 5.75% of the corporation’s qualified research expenses for the taxable year for which the credit is claimed

    How to Obtain the Credit?

    A taxpayer seeking the research expense credit, or the research credits applying to vehicles and energy-efficient devices, must claim the credit no later than four years after the unextended due date of the return to which it relates.

    Carryforward

    While the research credit is not refundable, amounts in excess of a taxpayer’s current tax liability can be carried forward for up to 15 years.

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