A favorable change in the Wisconsin research credit was passed for tax years beginning on or after January 1, 2018. The law change allows a portion of the credit to qualify as refundable. This helps Wisconsin companies benefit from the Wisconsin research credit even if they have no tax liability (note that the federal research credit is not refundable for income tax).
In December of 2019, the Wisconsin Department of Revenue issued proposed guidance on the 10 percent refundable portion of the research credit. The proposed guidance WI Credit Guidance includes information on:
1) Who may claim the refundable portion of the corporate income and individual income tax credit
2) Research credits eligible for the 10 percent refundable portion
3) Computation of the refundable portion
4) Using the prior year’s credit carryforwards to compute the refundable portion
5) Sharing the credit’s refundable portion with other members of the same combined group
Comments on the proposed guidance were due Jan. 13.