Michigan Businesses to Benefit from New Research and Development (R&D) Tax Credit

4 Minute Read
Posted by Laura Whittenburg, MSBME, Sr. Technical Writer on Jan 15, 2025 7:20:15 AM

LANSING, Michigan — Governor Gretchen Whitmer, J.D. has signed legislation that will provide a powerful boost to businesses: a new Research and Development (R&D) tax credit. This refundable tax credit, effective for tax years beginning on or after January 1, 2024, was implemented to incentivize innovation and invigorate the job market in the state of Michigan.

While eligible businesses should still claim the R&D tax credit at the federal level, this state-level tax credit provides further incentives to offset qualified research expenses incurred within the state. These expenses may include wages, supplies, and costs for contract research.

Michigan businesses should know the R&D tax credit’s key features:

  • Refundable credit: A company with zero tax liability can still receive a cash refund for qualified research expenses incurred in the state.
  • Small-business focus: Smaller companies enjoy a greater credit rate, rendering the R&D credit especially helpful to small businesses and startups.
    • Businesses with fewer than 250 employees are eligible for a 15% credit, capped annually at $250,000.
    • Businesses with more than or equal to 250 employees are eligible for a 10% credit, capped annually at $2 million.
  • Incentivized collaboration: Businesses that partner with Michigan’s research universities can receive an additional 5% credit, capped annually at $200,000.

About Acena Consulting

Acena Consulting is a multidimensional tax consultancy specializing in R&D tax credits. Our approach is hands-on, conservative, and technically driven, and our experienced team of tax professionals includes former Big Four national office partners, CPAs, and engineers.

We will provide peace of mind – keeping you informed of all tax deadlines and updates – and promise accelerated, accurate, and timely delivery of your documentation.

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Photo courtesy of kevin dooley on Flickr.

Laura Whittenburg, MSBME, Sr. Technical Writer

Laura Whittenburg, MSBME, Sr. Technical Writer

Laura most recently hails from the worlds of medicine and pharmaceutical R&D. She attended a U.S. medical school where she conducted research in Anesthesiology and Acute Care Surgery, passed the USMLE Step 1 "Boards" exam, and completed clinical rotations before transitioning her career to scientific writing. She sports the color purple at an alarming frequency to celebrate her alma mater, Northwestern University, where she earned her Bachelor's in Biological Sciences and Master's in Biomedical Engineering. Away from her desk, Laura reads fantasy novels and plays with her two schnauzers, Lyra and Sylphrena, who make guest appearances during her video calls.