Short answer. For tax years beginning after December 31, 2023, Wisconsin pays out at most 25 percent of the current year's research credit, and only from credit still left after it offsets your Wisconsin tax. A company with no Wisconsin tax can get the full 25 percent in cash. Credit that is neither used nor refunded goes on Schedule CF and stays available for 50 taxable years.
Key facts
| Refundable share (TYs beginning after Dec 31, 2023) | Up to 25% of the current-year credit |
|---|---|
| Earlier years | Up to 15% (2021 to 2023); up to 10% before 2021 |
| Refund amount | The lesser of credit left after tax or 25% of the current-year credit |
| Credit rate | 5.75% over 50% of the prior 3-year average (2.875% with no prior QRE) |
| What happens to the rest | Carries forward 50 taxable years (2025 Wis. Act 220) |
| Forms | Schedule R (credit); Schedule CF (carryforwards) |
Who can take the cash
The refund follows the credit, so any claimant with Wisconsin research can use it.
The Department of Revenue's Publication 131 lists who can claim the research credit: corporations, individuals, partners of a partnership, shareholders of a tax-option (S) corporation, and members of an LLC not taxed as a C corporation. The refundable share is part of the same credit, figured the same way for each of them.
The credit itself is 5.75 percent of Wisconsin qualified research expenses above 50 percent of your average for the prior three years. If you had no Wisconsin QRE in any of those three years, the rate is 2.875 percent. Everything about the refund starts from that number.
How the refund is sized
Two limits apply, and the smaller one wins.
For tax years beginning after December 31, 2023, the refund is the lesser of two amounts: the current-year credit left after you use it against your Wisconsin tax, or 25 percent of the current-year credit. Publication 131 spells out this rule. The percentage has risen twice: it was up to 10 percent before 2021 and up to 15 percent for 2021 through 2023.
The practical result is that the refund is largest for a company that owes little or no Wisconsin tax. A profitable company that uses most of its credit against tax may have little or nothing left to refund, even though the 25 percent ceiling is the same.
An illustrative example
Round numbers chosen to show the arithmetic, not a projection for any company.
A pre-profit SaaS company has $1,100,000 of Wisconsin QRE this year and a prior three-year average of $600,000. Half of that average is $300,000, so the excess is $800,000, and at 5.75 percent the credit is $46,000. The refund ceiling is 25 percent of $46,000, or $11,500.
If the company owes no Wisconsin tax, all $46,000 is left after tax, so the refund is the $11,500 ceiling. The other $34,500 is carried forward on Schedule CF. Now change one fact: the same company owes $40,000 of Wisconsin tax. The credit wipes out that tax and leaves $6,000. The refund is the lesser of $6,000 and $11,500, so $6,000 comes back in cash and nothing is left to carry.
The part that is not refunded
Credit you cannot use or receive as cash is kept, not lost.
The credit is claimed on Schedule R with your Wisconsin return. Any amount you do not use against tax and do not get back as a refund carries forward 50 taxable years under 2025 Wisconsin Act 220, and Schedule CF tracks each year's balance. For a company that stays pre-profit for several years, the carryforward will usually hold more of the credit than the refunds pay out, which makes the year-by-year schedule worth keeping clean.
The refund is paid on the records
Cash out the door is the part of a credit a state is most likely to look at.
A refund claim rests on the qualified research expenses behind it, and the Department of Revenue can review how those expenses were counted and which research was done in Wisconsin. R&D Binder produces the federal Section 41 documentation the Wisconsin credit is built on: business components, the four-part test analysis, and a QRE workpaper from your commit history and payroll. Your CPA files Schedule R, and whether your facts qualify is the CPA's call.
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 71.28(4) (research credit, corporations) - Wisconsin Legislature
- Wisconsin DOR Publication 131, Tax Incentives for Conducting Qualified Research in Wisconsin (7/26) - Wisconsin Department of Revenue
- 2025 Wisconsin Act 220 (SB 482), research credit carryforward extended to 50 years - Wisconsin Legislature
- Deloitte, Wisconsin 2023 Act 19 research credit refundability (July 2023) - Deloitte
- Wisconsin extends research income, franchise tax credit carryover (Apr. 13, 2026) - Bloomberg Tax
Get documentation built to survive an exam
R&D Binder produces the federal Section 41 binder and the Wisconsin state workpaper from one engagement, both built to survive an exam.