In strictly formal grammar, the correct answer would be:
I wish there were time for that
The use of 'wish' in this sentence indicates that the sentence is in the subjunctive mood, which is the mood used when you are talking about something hypothetical, or something that you wish to be true. (Subjunctive). In the subjunctive 'were' is used where you would normally use 'was'.
However, many (possibly most) English speakers don't pay any attention to the subjunctive mood and will use 'was' in this situation, as you have in your first sentence.
So either sentence can be used in informal situations, but it may be preferable to use the second sentence for formal or academic purposes.