Short answer. Wisconsin is 5.75 percent of your in-state research that exceeds 50 percent of your average for the prior three years, or 2.875 percent if you had no research in those years. Part of the credit is refundable, up to 25 percent for tax years beginning after December 31, 2023, and the rest carries forward 50 taxable years under 2025 Wisconsin Act 220.
Key facts
| Rate | 5.75% over 50% of the prior 3-year average |
|---|---|
| Rate (no prior QRE) | 2.875% of current-year Wisconsin QRE |
| Refundable | Partial, up to 25% (tax years 2024 on) |
| Carryforward | 50 taxable years (2025 Wis. Act 220) |
| Form | Schedule R |
5.75 percent over a three-year base
Wisconsin's rate is incremental, with a simpler base than the federal credit.
The credit is 5.75 percent of the amount by which your Wisconsin qualified research expenses exceed 50 percent of your average QRE for the three prior years. If you had no QRE in any of those three years, the rate is 2.875 percent of the current year's Wisconsin QRE. The base is simpler than the federal fixed-base percentage: just half of your three-year average.
Only research conducted in Wisconsin counts. A higher 11.5 percent rate exists for research on internal combustion engines and certain energy-efficient products, but most software companies use the 5.75 percent standard rate.
Part of it is cash
Wisconsin's advantage for an early-stage company is the refundable share.
The refundable share has stepped up over time: up to 10 percent for tax years before 2021, up to 15 percent for 2021 through 2023, and up to 25 percent for tax years beginning after December 31, 2023. The credit first offsets your Wisconsin tax; up to 25 percent of the total is then refundable as cash, figured on Schedule R.
For an unprofitable software company with little or no Wisconsin tax, the refundable portion turns part of the credit into cash now rather than a credit you can only carry forward.
The rest carries forward 50 taxable years
What is not refunded is not lost.
Unused credit that is not refunded carries forward 50 taxable years under Wis. Stat. sections 71.07(4k)(e)2.b, 71.28(4)(f), and 71.47(4)(f). 2025 Wisconsin Act 220, enacted April 8, 2026, extended the carryforward from 15 to 50 taxable years for all credits not yet expired when the law took effect, and the Department of Revenue's Publication 131 agrees. There is no carryback. The credit is claimed on Wisconsin Schedule R, filed with the Wisconsin income or franchise tax return, and the qualified expense definition tracks federal Section 41.
More on Wisconsin's R&D credit
The full state overview, the federal Section 41 work it builds on, and related state guides:
Sources
Every claim on this page traces to a primary authority. Each source below is independent and verifiable.
- Wisconsin Statutes 71.07(4k) (research credit) - Wisconsin Legislature
- Wisconsin Statutes 71.28(4) (research credit, corporations) - Wisconsin Legislature
- 2025 Wisconsin Act 220 (SB 482), research credit carryforward extended to 50 years - Wisconsin Legislature
- Wisconsin DOR Publication 131, Tax Incentives for Conducting Qualified Research in Wisconsin (7/26) - Wisconsin Department of Revenue
- Wisconsin extends research income, franchise tax credit carryover (Apr. 13, 2026) - Bloomberg Tax
- Wisconsin Department of Revenue, Research Credits - Wisconsin Department of Revenue
- 26 U.S.C. ยง 41 (credit for increasing research activities) - Cornell Law School, Legal Information Institute
Get documentation built to survive an exam
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