Research and Development Credits

Basic research credit: The research expense credit provides an incentive to corporations for increasing qualified research activities in Wisconsin. The credit equals 5 percent of the difference between the claimant’s qualified research expenses for research conducted in Wisconsin and its Wisconsin base amount.

Super research and development credit: For taxable years beginning on or after January 1, 2011 and before January 1, 2014, a credit is available to corporations equal to the amount of qualified research expenses paid or incurred by the corporation for research conducted in Wisconsin that exceeds the amount calculated by averaging the qualified research expenses paid or incurred in the 3 taxable years immediately preceding the taxable year for which a credit is claimed, multiplied by 1.25.

Research facilities credit: A credit is available to corporations equal to 5 percent of the amount paid or incurred by the corporation during the taxable year to construct and equip new facilities or expand existing facilities used in this state for qualified research. Eligible amounts only include amounts paid or incurred for tangible, depreciable property and do not include amount paid or incurred for replacement property. The credit is available for taxable years prior to January 1, 2014.

Engine research credit: Credit is available to corporations equal to 10 percent of the amount paid or incurred to construct and equip new facilities or expand existing facilities, except replacement property, used in this state for qualified research relating to designing internal combustion engines for vehicles, designing vehicles powered by internal combustion engines, and improving production processes for internal combustion engines and vehicles. In addition, credit is available for designing and manufacturing energy efficient lighting systems, building automation and control systems, or automotive batteries for use in hybrid electric vehicles that reduce the demand for natural gas or electricity or improve the efficiency of its use. The credit is available for taxable years prior to January 1, 2014.