Wisconsin Research Expense Credit

Program overview

Wisconsin allows a credit on the increase in qualified research expenses conducted in Wisconsin, with a doubled rate for research related to designing internal combustion engines and energy efficient lighting systems. A meaningful share of the credit is refundable, with the balance carried forward, which combines cash support for early-stage companies with long-term value for established manufacturers. Wisconsin follows federal Section 41 definitions applied to in-state activity.

Eligibility

Corporations and pass-through entities with qualified research expenses for research conducted in Wisconsin.

Benefits

Partially refundable credit against Wisconsin income and franchise tax, with the remainder carried forward.

Wisconsin IDR questions

What an examiner is likely to ask about this credit. S1–S7 apply to every state claim; the rest come from this program's own rules.

1. S1Confirm the research was physically performed within Wisconsin.
2. S2Provide the Wisconsin qualified research expense calculation and base amount.
3. S3Reconcile Wisconsin expenses to the federal Form 6765.
4. S4Show how wages and supplies were apportioned between Wisconsin and other locations.
5. S5Provide the Wisconsin return and credit schedule for each year claimed.
6. S6Show the carryforward schedule for unused Wisconsin credits.
7. S7Confirm the entity claiming the credit is the entity subject to Wisconsin tax.
8. WI-1Show the Wisconsin refund eligibility tests (such as small business status) were met in each year refunded.

Draft questions for illustration, reviewed by a specialist before any engagement.