Michigan Introduces State R&D Tax Credit

Michigan businesses now have a major opportunity to get rewarded for their innovative work, thanks to the state R&D Tax Credit that was signed into law on January 13th, 2025. With this law, Michigan joins the long list of U.S. states that offer a state version of the R&D tax credit in addition to the federal credit.

$100 million in R&D tax credits will be available for eligible expenses effective January 1st, 2024, allowing companies to claim expenses incurred during the previous year. Notably, 25% of these funds are specifically set aside for businesses with 250 or fewer employees.

Eligible businesses can claim a credit of 3% of their qualifying R&D expenses in a given tax year up to the law’s base amount. For companies with over 250 employees, any expenses exceeding the base amount can qualify for a credit of 10%, capped at $2 million. Smaller businesses, however, can claim 15% of their expenses over the base amount, with a maximum credit of $250,000.

Additionally, businesses collaborating with a Michigan research university on R&D projects can claim an extra 5% credit on those expenses over the base amount, up to $200,000.

To access these credits, eligible businesses must submit a tentative claim to the Michigan Treasury by March 15 following the end of the tax year.

Don’t miss out on this game-changing opportunity to secure additional funding for your business!