Are R&D Tax Credits Available in Michigan?

No. Companies in the State of Michigan may claim a Research and Development (R&D) Tax Credit against the Michigan business tax for Qualified Research Expenses ("QREs"). The amount of the credit is 1.9% of the taxpayer's QREs in Michigan.

This credit, combined with the investment tax credit and the compensation credit, cannot exceed 65% of the total Michigan business tax liability before the surcharge.

Get More Information About the R&D Tax Credit

The R&D Tax Credit, first enacted in 1981, has been one of the most valuable credits leveraged by companies. Every year, the R&D credit yields billions of dollars in federal and state benefits to companies engaged in qualifying research. This credit provides much-needed cash to hire additional employees, increase R&D, expand facilities, and more. Thousands of companies take advantage of the credit across several industries. » Learn More

Four-Part Test

Qualified research activities are defined by the four-part test outlined below

  • Technological in Nature
    Activities must fundamentally rely on the principles of physical or biological science, engineering, or computer science.

  • Permitted Purpose
    Activities must be performed in an attempt to improve the functionality, performance, reliability, or quality of a new or existing business component.

  • Eliminate Uncertainty
    Activities intended to discover information that could eliminate technical uncertainty concerning the development or improvement of a product.

  • Experimentation
    All activities must include a process of experimentation including testing, modeling, simulating, and systematic trial and error.