Michigan Department of Treasury Releases Proration Notice for 2025 R&D Credit Claims

Michigan taxpayers now have more clarity on the value of their 2025 Michigan R&D Credits (Read our previous blog).

On April 24, 2026, the Michigan Department of Treasury issued its Proration Notice for the 2025 R&D Credit claim period.  This notice first confirmed that the total tentative claims exceeded the program’s annual $100 million cap, meaning that taxpayers will need to adjust their tentative credit claims depending on whether they are a large employer or small employer.  The larger employer proration percentage is 50.96%, while the small employer proration percentage is 59.88%.  This means that a large employer with a tentative credit of $100k would be eligible to claim $50,960 after proration.  A small employer with the same tentative credit would be eligible to claim $59,880.

CIT filers will utilize the adjusted credit on their CIT return for that expense year.  Withholding filers will utilize the adjusted credit on the annual return for the tax year following the expense year, but also have the option to offset their withholding for the May through December period following the expense year.

For Michigan taxpayers, the release of the proration notice is a key step in finalizing the benefit available for 2025 R&D activity. Companies that submitted tentative claims should review their calculations, apply the appropriate proration percentage, and ensure the adjusted credit is properly reflected on their Michigan filings. While the proration reduces the ultimate benefit, the refundable nature of the credit still makes Michigan’s R&D program a valuable opportunity for companies investing in research and development within the state.