Short answer. You can claim both. Wisconsin runs its own credit, 5.75 percent of the increase in your Wisconsin research over a base, separate from the federal Section 41 credit, so the same in-state work earns both. A portion of the Wisconsin credit, up to 25 percent for years from 2024, is refundable as cash, and the rest carries forward 15 years.
Key facts
| Claim both? | Yes, on the same Wisconsin research |
|---|---|
| Federal rate | 20% regular / 14% ASC |
| Wisconsin rate | 5.75% of the increase (11.5% for engine and energy-efficiency research) |
| Wisconsin refundable? | Up to 25% of the credit is refundable (from 2024) |
| Forms | Form 6765 (federal) + Schedule R (Wisconsin) |
Two credits on the same research
Wisconsin computes its own credit on Wisconsin expenses; the federal credit runs on your nationwide expenses.
The federal Section 41 credit is claimed on Form 6765 with your federal return. Wisconsin's credit is claimed on Schedule R with the state return, and the same research performed in Wisconsin can support both in the same year.
Wisconsin uses the federal definitions of qualified research and qualified research expenses but applies its own rate to the increase in your Wisconsin research, so the federal work is the basis for the state claim.
Federal Section 41 vs. Wisconsin, factor by factor
Wisconsin makes part of the credit refundable, without the federal payroll-offset limits.
| Factor | Federal Section 41 | Wisconsin |
|---|---|---|
| What it is | Credit for increasing research activities | Wisconsin research credit |
| Credit rate | 20% regular / 14% ASC | 5.75% of the increase over a base (11.5% for engine and energy-efficiency research) |
| Refundable | No - a QSB may offset up to $500,000 of payroll tax under Section 41(h) | Up to 25% of the current-year credit is refundable (15% for 2021-2023) |
| Carryforward | 20 years, with a 1-year carryback | 15 years for the nonrefundable portion, no carryback |
| Where research must occur | United States | Wisconsin only |
| How you claim it | Form 6765 with the federal return | Schedule R with the Wisconsin return |
| Claim alongside the other? | Yes, on the same underlying QRE | Yes, on the same underlying QRE |
| Documentation | Four-part test and QRE substantiation (Treas. Reg. 1.41-4) | Uses the Section 41 definition (2022 federal rules), Wisconsin research only |
Where Wisconsin differs from federal
Two features set Wisconsin apart from the federal credit.
Part of it is refundable. For tax years from 2024, up to 25 percent of the current-year Wisconsin credit is refundable as cash, raised from 15 percent in 2021 through 2023, without the qualified-small-business limits of the federal Section 41(h) offset. The nonrefundable remainder carries forward 15 years.
Its own rules and a higher specialized rate. Wisconsin computes the credit under its own statute using the federal definitions as of the end of 2022, so its qualified expenses can differ from current federal figures. Research on internal combustion engines or certain energy-efficient products earns 11.5 percent rather than 5.75 percent, and only Wisconsin research counts.
One evidence base for both
The records that prove the federal claim are what Wisconsin relies on too.
Because Wisconsin uses the federal definitions of qualified research, the four-part test analysis and the wage, contractor, and supply records that substantiate your federal credit under Treas. Reg. 1.41-4 support the Wisconsin claim, limited to the in-state share. You build the evidence once.
R&D Binder documents the federal Section 41 four-part test that both credits stand on, with Wisconsin handled as a state add-on from the same evidence. Whether your facts qualify, and which credits to claim, is a determination for your CPA.
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 Department of Revenue, Research Credits - Wisconsin Department of Revenue
- 26 U.S.C. § 41 (credit for increasing research activities) - Cornell Law School, Legal Information Institute
- IRS, About Form 6765 - Internal Revenue Service
- Treas. Reg. § 1.41-4 (recordkeeping and substantiation of qualified research) - Cornell Law School, Legal Information Institute
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.