The IRS on Dec. 20 released the draft Instructions for Form 6765, Credit for Increasing Research Activities, and is seeking feedback on proposed changes to the form, which is used by taxpayers to claim the research and development (R&D) tax credit.
The IRS is seeking feedback regarding the draft instructions but specifically about Section G reporting for controlled groups, ASC 730 Directive, Section G business component detail and statistical sampling.
Feedback regarding the tax year 2024 draft or final instructions can be submitted to lbi.rt.team@irs.gov through June 30, 2025, using the subject line: “Instructions for Form 6765.” All feedback will be considered to ensure the tax year 2025 (processing year 2026) instructions provide clear and updated guidance on completing the form. The IRS said it remains committed to engaging with stakeholders in preparation for tax year 2025 (processing year 2026).
These instructions will be used in conjunction with revised draft Form 6765 released on Dec. 12, 2024, which includes a new Section E seeking other business information, a new Section F summarizing the qualified research expenses, and a new Section G for reporting business component details. The IRS said it’s encouraging taxpayers and their representatives to review and consider using the new format when preparing their tax year 2024 return.
The IRS said it anticipates publishing the final tax year 2024 Form 6765 and Instructions by the end of January 2025.
Section G will be optional for all filers for tax year 2024 (processing year 2025). For tax year 2025 (processing year 2026) and beyond, Section G will be mandatory for all filers with optional reporting for:
- Qualified small business (QSB) taxpayers, defined under section 41(h)(1) & (2) of the Internal Revenue Code who check the box to claim a reduced payroll tax credit; or
- Taxpayers with total qualified research expenses (QREs) equal to or less than $1.5 million, determined at the control group level and equal to or less than $50 million of gross receipts, as determined under section 448(c)(3) (without regard to subparagraph (A) thereof), claiming a research credit on an original filed return.
The Form 6765 improvement effort was informed by stakeholder feedback, according to the IRS. The agency released an early preview of Form 6765 changes on Sept. 15, 2023, and invited comments from interested parties on the proposed changes. In response, the IRS received numerous comments from various external stakeholders and announced a revised form last June.
Improvements to Form 6765 are intended to make tax reporting more consistent, improve the information received for tax administration, and build an ongoing effort to manage resources in a more effective and efficient way, the IRS said.
For more information visit IRS.gov to learn more about Form 6765, Credit for Increasing Research Activities.
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Tags: IRS, Small Business, Taxes
