Key insights
- Wisconsin made significant changes to its largest economic development program to make more projects eligible and credits easier to use.
- Under the new legislation, only projects with capital investment are eligible for full benefits.
- The legislation also adds additional tax credit categories for investing in workforce housing and providing childcare benefits.
- Projects meeting either job creation or capital investment goals are eligible to receive partial benefits.
Wisconsin Tax Credit Changes may offer your business new benefits.
Wisconsin has made significant changes to its Business Development Tax Credit (BTC) program. The changes shift the program’s focus away from job creation and toward projects with capital expenditures.
Discover how these changes can benefit your business and enhance your growth potential in Wisconsin.
Highlights of BTC program changes
The BTC program was created to encourage businesses to invest in Wisconsin communities by providing tax credits for projects with job creation, job training, and capital investment. If the BTC exceeds a taxpayer’s Wisconsin tax liability, the excess is paid by the state to the business (i.e., as a refundable credit).
Eligibility factors
To be eligible for BTC awards, a business must:
- Create or retain jobs in Wisconsin, and/or
- Make capital investment in real or business personal property.
According to the BTC guidelines, evaluation of all BTC applications will include the following factors:
- Whether the project might not occur without the allocation of tax credits,
- The extent to which the project will increase employment in this state,
- The extent to which the project will contribute to the economic growth of this state,
- The extent to which the project will increase geographic diversity of available tax credits throughout this state,
- The financial soundness of the business,
- Whether the business offers health, retirement, and other benefits, and
- Any previous financial assistance that the business received from the Department of Commerce or the Wisconsin Economic Development Corporation (WEDC).
Tax credits available
The tax credit for job creation is up to 10% of annual wages, for up to three years, paid to eligible employees.
A job training tax credit covers up to 50% of eligible training costs.
Businesses can receive up to 3% of capital investment in business personal property and up to 5% of eligible capital investment in real property. The investment must be at least $250,000, or if less than $250,000 be equal to at least $10,000 per eligible employee.
Added workforce housing and childcare benefits
In addition to the changes in eligibility requirements, the new rules allow businesses to claim BTC tax benefits for investments in workforce housing and childcare benefits for eligible employees. Businesses will be able to claim tax benefits of up to 15% of their investment in these programs.
This provision is intended to encourage businesses to invest in their employees’ well-being and quality of life, which can lead to increased productivity and job satisfaction.
Claiming partial benefits
Another significant change is the legislation essentially decouples the capital investment and job creation thresholds for a project. For example, if a project meets its capital investment goal but not its job creation goal, it can still claim partial benefits for the capital investment portion.
Previously, a project would not be eligible for any benefits unless it met both capital investment and job creation goals.
How we can help
CLA’s state and local tax professionals can help you evaluate whether the Wisconsin BTC program can provide benefits for your business and enhance the return on your capital expenditures and employee-related expenditures.
Contact us
Wisconsin Tax Credit Changes may offer your business new tax savings opportunities. Complete the form below to connect with CLA.
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