Unadjusted Credit: Fewer Than 250 Employees

Eligible businesses claiming the Research and Development (R&D) Tax Credit must calculate their unadjusted credit while submitting an R&D Credit Application in Michigan Treasury Online (MTO). MTO will guide users through this initial calculation, which is based on the business’s:

• Employer size: fewer than 250 employees, or 250 or more employees
• Maximum credit amount (determined by employer size)
• Michigan Qualified R&D Expenses (MQREs)
• MQREs for the prior three calendar years (used to calculate the base amount)
• Michigan research university MQREs, if applicable

Claimants will use final, accurate values with the equations below in MTO to calculate the unadjusted credit for an eligible business with fewer than 250 employees.

• Unadjusted credit = standard credit + Michigan research university credit (if applicable)
• Maximum unadjusted credit: $450,000
• Standard credit = (3% × base amount) + (15% × (MQREs − base amount))
• Maximum standard credit: $250,000
• Michigan research university credit = 5% × Michigan research university MQREs
• Maximum Michigan research university credit: $200,000