Employee information is part of Form 6765 Section G business-component reporting. This page explains what employee information matters for Section G. It is educational and is not individualized advice. For the underlying framework, see our page on Form 6765.
What Employee Information Supports Section G
Employee information that may support Section G includes:
- Which employees — identifying the employees who performed or directly supported qualified research.
- Qualified services — what qualified services the employees performed (engaging in qualified research, direct supervision, or direct support).
- Business component nexus — which business components the employees worked on.
- Time allocation — how the employees' time was allocated across business components and activities.
- Wage connection — how the employees' wages connect to the qualified research expenses reported.
For more on employee wages, see our page on employee wages.
The Qualified-Services Framework
Under Section 41(b)(2), qualified services include engaging in qualified research, engaging in the direct supervision of qualified research, and engaging in the direct support of qualified research. Employee information for Section G should reflect which of these categories the employees' services fall within. For more, see our page on wage allocation documentation.
Section G Reporting Requirements
The specific employee information required for Section G depends on the tax year and the current instructions. Section G is optional for tax years beginning before 2026. For tax years beginning after 2025, Section G is required, with two exceptions: (1) qualified small businesses (QSBs) making the payroll tax credit election under Section 41(h) are exempt, and (2) taxpayers whose qualified research expenses are $1.5 million or less AND whose average annual gross receipts are $50 million or less, reporting on an original return, are also exempt. The small-taxpayer exception does not apply to amended returns. Because Section G rules are tax-year-sensitive and have changed repeatedly, readers should verify the current applicable thresholds and conditions against the current Instructions for Form 6765.
Hypothetical Example
Consider a manufacturer that has records identifying which employees performed qualified research, which business components they worked on, what qualified services they performed, and how their wages were allocated. This information can help support the Section G employee reporting.
This example is illustrative only.
Key Takeaway
Employee information for Form 6765 Section G includes identifying which employees performed qualified services, for which business components, and how their wages connect to qualified research expenses. Because Section G requirements are tax-year-sensitive, professional review is appropriate.