IRS Releases Revised Draft Form 6765: Credit for Increasing Research Activities

IR-2024-171

WASHINGTON — The Internal Revenue Service (IRS) today announced the release of a draft of Form 6765, Credit for Increasing Research Activities, also known as the Research Credit.

The IRS received valuable comments from various external stakeholders, which led to several revisions aimed at reducing taxpayer burden. These changes are intended to provide taxpayers with a consistent and predefined format and to improve the quality of information collected for tax administration purposes.

Key Changes Include:

• Optional Reporting of Section G
  Section G, previously labeled as Section F, requests Business Component Detail. It will be optional for:

  • Qualified Small Business (QSB) taxpayers, as defined under section 41(h)(1) & (2), who elect a reduced payroll tax credit;
  • Taxpayers with total qualified research expenditures (QREs) of $1.5 million or less, and gross receipts of $50 million or less, who claim a research credit on an original filed return.

• Reduced Scope of Business Component Detail and Other Revisions
  Based on stakeholder feedback, the IRS reduced the number of business components required to be reported in Section G. Taxpayers should report 80% of total QREs in descending order by amount per business component, capped at 50 components. The amount of detail required has also been reduced, including the removal of information on whether a business component is new/improved, for sale/license/lease, and other descriptive details.

The revised Section G will be optional for all filers for the 2024 tax year (processing year 2025) to allow time for transition. It will become mandatory for the 2025 tax year (processing year 2026).

For further details, please refer to Form 6765 PDF.