The Wisconsin R&D tax credit, explained
Yes, Wisconsin offers a 5.75% research credit on qualified expenses above a base amount, with up to 25% refundable.
Last verified July 2026 against Wisconsin Department of Revenue guidance.
The short answer
Does Wisconsin have an R&D tax credit? Yes. The Wisconsin Research Credit equals 5.75% of the amount by which a company's qualified research expenses exceed 50% of its average qualified research expenses over the prior 3 years. New businesses with no research history in those 3 years can instead claim 2.875% of the current year's qualified research expenses.
How the Wisconsin credit works
Certain research, tied to internal combustion engines or specific energy-efficient products, qualifies for a doubled rate of 11.5% instead of 5.75%. Most software, hardware, and general product development work uses the standard 5.75% rate.
For tax years starting on or after January 1, 2024, up to 25% of the credit is refundable, paid out even if the company has little or no Wisconsin tax liability. The remaining 75% is nonrefundable and carries forward up to 15 years.
How it stacks with the federal credit
Wisconsin's credit stacks with the federal R&D credit, worth roughly 6% to 10% of qualified spend. Startups under $5 million in revenue can also apply up to $500,000 of the federal credit against payroll taxes each year.
Example: a Madison biotech startup with 18 employees and $1.9 million in qualified research expenses, exceeding its base amount by $1.5 million, would generate a Wisconsin credit of about $86,250 (5.75% of $1.5 million). Up to 25% of that, roughly $21,600, could come back as a refund even with minimal state tax liability, with the rest carried forward. At a 7% effective federal rate on the same spend, the federal credit adds roughly $133,000, much of it usable against payroll tax for a qualifying startup.
The partial refundability makes Wisconsin's credit more useful than most state credits for an early-stage company, since a quarter of it turns into cash flow instead of sitting as a carryforward on the balance sheet.
Takes about 60 seconds. No signup.
Eligibility and how to claim it
Any company performing qualified research in Wisconsin, using the same federal definition of qualified research, can claim the credit against Wisconsin income or franchise tax.
The credit is claimed on Schedule R, Wisconsin Research Credits, filed with the company's Wisconsin income or franchise tax return. Pass-through entities like S corporations and partnerships also report it on Schedule R and allocate it to owners through Schedule K-1. The Wisconsin Department of Revenue administers the credit.
Claimship prepares the federal research study and Form 6765 package that documents the qualified expenses. The company's CPA files the Wisconsin return and computes the credit on Schedule R.
Official source: Wisconsin Department of Revenue.
Carryforward and deadlines
The nonrefundable 75% portion of unused credit carries forward for up to 15 years. The refundable 25% portion is paid out in the year claimed and does not carry forward, since there is nothing left to carry once it is refunded.
The credit is claimed with the company's regular annual Wisconsin tax filing. There is no separate application deadline or pre-approval step required before claiming it.