Wisconsin refunds up to 25% of your R&D credit.

Rate	5.75% over 50% of the prior 3-year average
Refundable	Partial (up to 25%, TY2024 on)
Carryforward	15 years
Form	Schedule R

A nonrefundable credit only helps a company that owes tax. If you owe nothing, you bank it and carry it forward. Wisconsin lets you take part of the research credit as a cash refund even when it exceeds your tax, and the refundable share has stepped up over time:

• Up to 10 percent for tax years 2018 through 2020.
• Up to 15 percent for tax years 2021 through 2023.
• Up to 25 percent for tax years beginning in 2024 and after.

The refundable portion is figured on Schedule R. The credit first offsets your Wisconsin tax for the year; up to 25 percent of the total credit is then refundable, and anything past that carries forward up to 15 years.

Why this matters for a startup: an unprofitable software company spending more on engineering than it earns in Wisconsin usually has no Wisconsin tax to offset. The refundable portion turns part of the credit into cash now, which is the whole point for a company that cannot use a nonrefundable credit.

The credit is the federal research credit, narrowed to Wisconsin. The mechanics:

• Rate. 5.75 percent of the amount by which Wisconsin qualified research expenses exceed 50 percent of the average QRE for the 3 prior years. If you had no QRE in any of those 3 years, the rate is 2.875 percent of the current year's Wisconsin QRE.
• It is incremental, with a Wisconsin base. The base is 50 percent of the average QRE for the 3 preceding years, a simpler base than the federal fixed-base percentage. Only spending above that base earns the credit.
• Enhanced rates exist but rarely apply to software. Research related to internal combustion engines and to certain energy efficient products earns 11.5 percent. Most SaaS companies use the 5.75 percent standard rate.
• Wisconsin-only. The research has to be conducted in Wisconsin. Expenses for research done elsewhere do not count, even where the federal definition would include them.
• Same expense definition as federal. Qualified research expenses follow IRC Section 41: wages for qualified services, supplies, and contract research. The work that supports your federal claim supports the Wisconsin claim, limited to the Wisconsin-performed portion.
• Who claims it. Individuals and pass-through owners (LLCs and S corporations) claim the credit against the individual income tax under section 71.07(4k). C corporations claim the parallel credit under sections 71.28(4) and 71.47(4).
• Carryforward. Unused credit that is not refunded carries forward up to 15 years. There is no carryback.

The credit is claimed on Wisconsin Schedule R, Wisconsin Research Credits, filed with the Wisconsin income or franchise tax return.

R&D Binder produces federal Section 41 documentation from your GitHub commit history. The binder is what supports your federal Form 6765 and, starting tax year 2026, the mandatory Form 6765 Section G appendix. Because Wisconsin uses the same Section 41 expense definition, that same evidence supports the Wisconsin credit for the portion of the work conducted in Wisconsin.

The Wisconsin state credit workpaper is a $995 add-on to the standard binder engagement. It produces:

• A Wisconsin-attributable QRE breakdown: wages, supplies, and contractor expenses tied to research conducted in Wisconsin, using the same business-component partition as the federal binder.
• Schedule R input values: Wisconsin qualified research expenses, the 50-percent-of-3-year-average base, and the credit computed at 5.75 percent (or 2.875 percent if you had no QRE in the prior 3 years).
• A refund note: the refundable portion for the year (up to 25 percent for tax years beginning in 2024) and whether taking the refund or carrying the balance forward fits your tax position.
• Filing notes for your CPA: that the credit goes on Schedule R and which return it attaches to.

We do not file Schedule R or sign the Wisconsin return. That stays with your CPA, the same way federal Form 6765 does. R&D Binder produces the workpaper; your CPA files.

If you operate in more than one state, additional state workpapers are $995 each. Most states with an R&D credit track the federal QRE definition closely, so the marginal cost per state is low once the federal binder is complete.

A worked example. A Madison SaaS company with 12 engineers, $2.4M in qualifying wages (the federal QRE pool), and 9 engineers conducting their research in Wisconsin.

• Federal Section 41 credit. Computed on the full $2.4M federal QRE pool through Form 6765, claimed by the CPA. R&D Binder produces the binder, QRE workpaper, and Form 6765 Section G appendix.
• Wisconsin credit. Computed on the Wisconsin-conducted portion of QREs. Allocate roughly $1.8M to Wisconsin ($2.4M times the 9/12 engineer ratio, refined by each employee's actual research location). Assume the average QRE for the prior 3 years was $1.2M, so the base is 50 percent of that, or $600,000. The excess over the base is $1.2M, and the credit is 5.75 percent of $1.2M, or $69,000.
• The refundable portion. If the company is pre-profit with no Wisconsin tax to offset, it can refund up to 25 percent of the $69,000 credit, which is $17,250 in cash, and carry the remaining $51,750 forward for up to 15 years.
• Total engagement cost. SaaS Standard tier ($4,995, 6 to 25 FTE) plus the Wisconsin state workpaper add-on ($995). Total $5,990.

The base amount and the engineer allocation are specific to each company; the numbers above are illustrative. The CPA files both returns. R&D Binder never appears on the federal or Wisconsin return.

If the Wisconsin Department of Revenue examines a return on which the research credit was claimed, the substantiation expected is the same kind the IRS expects under federal Section 41: business-component identification, four-part-test rationale, contemporaneous evidence, and QRE allocation by employee, contractor, and supplies, plus support that the research was conducted in Wisconsin. The binder R&D Binder produces is built to that standard from the federal side, and the Wisconsin workpaper inherits the same business-component structure and adds the in-state allocation.

Our standard scope ends at delivering the binder and the state workpaper. Audit-defense engagement for a Wisconsin Department of Revenue examination is a separate scope at $250 per hour, scoped per incident. We do not represent before the Department; that remains your CPA's responsibility or your tax controversy attorney's.

• Wisconsin Statutes section 71.07(4k) (research credit for individuals, partnerships, tax-option corporations, and LLCs), including the 5.75 percent and 2.875 percent rates, the 50-percent-of-3-year-average base, the in-state requirement, the refundable portion, and the 15-year carryforward. Sections 71.28(4) and 71.47(4) provide the parallel credit for corporations. Wisconsin Legislature.
• Wisconsin Department of Revenue, Wisconsin Research Credits, and the Refundable Portion of Research Credit guidance (up to 25 percent for tax years beginning in 2024).
• Wisconsin Department of Revenue, Publication 131, Tax Incentives for Conducting Qualified Research in Wisconsin.
• Wisconsin Department of Revenue, 2025 Schedule R, Wisconsin Research Credits, and its instructions, which compute the refundable portion at 25 percent.
• IRS Form 6765 (federal Credit for Increasing Research Activities) and Internal Revenue Code Section 41, the federal definition Wisconsin incorporates.

This page is general informational content, not tax advice for any specific taxpayer. The Wisconsin credit is administered by the Wisconsin Department of Revenue. Rates, the refundable percentage, and procedural requirements reflect Wisconsin Statutes section 71.07(4k) and Department of Revenue guidance as of June 2026. Confirm current figures and deadlines with your CPA or the Department before filing.

• The Section 41 four-part test
• What is a qualified research expense (QRE)?
• Form 6765 and Section G
• Minnesota R&D credit
• Arizona R&D credit
• California R&D credit
• Connecticut R&D credit