Michigan Research and Development Tax Credit
Michigan Department of Treasury
3% of QRE + 15% of excess (fully refundable)
Reinstated for tax years beginning on or after January 1, 2025 under Public Acts 186 and 187 of 2024 — more than a decade after Michigan's prior credit lapsed with the 2012 Michigan Business Tax repeal. It's fully refundable, but the $100M statewide cap was oversubscribed and prorated in its first year (2025).
Michigan reinstated a state R&D tax credit for tax years beginning on or after January 1, 2025, under Public Acts 186 and 187 of 2024 — its first state R&D credit since the Michigan Business Tax (and the R&D credit that ran under it) was phased out starting in 2012. The new credit is fully refundable at 3% of qualified research expenses (QRE) up to a base amount, plus 15% of the excess above base for employers with fewer than 250 employees (10% of the excess for employers with 250 or more employees). Total credits statewide are capped at $100 million per year, with $25 million of that reserved for small businesses. The inaugural year (2025) saw claims exceed the cap, triggering the statutory proration provisions — claimants received less than 100% of their computed credit. A claim/notification filing with the Michigan Department of Treasury is required; the first statutory filing deadline was April 1, 2026.
- Funding type
- Tax Credit
- Level
- State
- Amount
- 3% of QRE up to base, plus 15% of excess (under 250 employees) or 10% of excess (250+ employees); $100M statewide annual cap, $25M reserved for small business
- Deadline
- Credit is available for tax years beginning on or after January 1, 2025; a tentative claim is due by March 15 after the calendar year of the expenses (March 15, 2027 for 2026 expenses).
- Status
- active
- States
- MI
- Payment model
- tax offset
Who qualifies
- Any Michigan business incurring qualified research expenses (QRE) for tax years beginning on or after January 1, 2025 — Corporate Income Tax (CIT) taxpayers and certain flow-through entities
- Reinstated by Public Acts 186 and 187 of 2024, effective for tax years beginning January 1, 2025 — this is a new program, not a revival of Michigan's old Michigan Business Tax (MBT) credit that was phased out starting in 2012
- Credit rate depends on employee count: 3% of QRE up to a base amount, plus 15% of the excess for businesses with fewer than 250 employees, or 10% of the excess for businesses with 250 or more employees
- Fully refundable — excess credit over Michigan tax liability is paid out in cash, with no carryforward or carryback required
- Subject to a $100 million statewide annual cap, with $25 million reserved for small businesses; claims exceeding the cap are prorated under statutory proration rules
- Requires an annual claim/notification filing with the Michigan Department of Treasury; the first statutory filing deadline was April 1, 2026, for 2025 tax-year expenses
Good to know
- 2025, the inaugural year, was oversubscribed: total claims exceeded the $100M cap, and the Department of Treasury issued a proration notice reducing the amount actually paid to claimants below their computed credit
- Michigan has decoupled from federal IRC §174, so R&D costs must be amortized over 5 years for Michigan CIT purposes even where the federal treatment differs — plan the state/federal QRE calculations separately
Don't assume the $100M cap means you'll get your full computed credit — 2025's launch year was oversubscribed and Treasury prorated payouts. File your annual claim/notification as early as possible, and budget for the possibility of a reduced payout in a high-demand year. This stacks with the federal §41 credit.
Deadline & timing
Michigan's reinstated R&D credit requires an annual claim/notification filing with the Michigan Department of Treasury. The first statutory filing deadline was April 1, 2026, for expenses incurred during the 2025 calendar year. If total tentative claims across all Michigan taxpayers exceed the $100 million statewide cap for a given year, the Department applies statutory proration to reduce the allowed credit for all or certain claimants — as it did for 2025 claims. Confirm the current year's filing deadline and any proration notice directly with Treasury before assuming your full computed amount will be paid.
Deadline: March 15, 2027 — put it in your calendar before you close this tab.
Includes reminders one week and one day before. Verify on the official program page — funders move dates.
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Programs that stack well
- Research & Development Tax Credit (Section 41)
- Federal R&D tax credit guide
- Best state R&D tax credits for 2026 — see how Michigan's new credit compares to other states
Related programs
Also open right now
Alternatives computed from the live GrantCompass catalog on November 1, 2026 — all 170 open grant programs · filter the database.
Explore more funding
Status verified July 2026 against Michigan Department of Treasury's official notice on the reinstated credit. GrantCompass is an independent funding-discovery tool and is not affiliated with any government agency. Always confirm details on the official program page.