Forms & Elections

What Is Form 6765?

Form 6765, Credit for Increasing Research Activities, is the IRS form used to figure and claim the R&D tax credit, elect the reduced credit under Section 280C, and elect and figure the qualified small business payroll tax credit. It is a reporting tool — not a determination of whether research qualifies.

What Is the R&D Payroll Tax Credit?

The R&D payroll tax credit lets a qualified small business apply a portion of its research credit against the employer share of social security and Medicare tax rather than income tax. Eligibility depends on the Section 41(h)(3) gross-receipts requirements, and the election is made on Form 6765 attached to a timely-filed income tax return.

How to Organize Business Components for Form 6765

Organizing business components for Form 6765 involves grouping activities and costs by business component and reporting at the appropriate level of detail. The 80%/top-50 rule may apply for Section G reporting.

How Project Documentation Supports Form 6765 Section G

Project documentation can support Form 6765 Section G by providing the business-component-level information that the section requires. Documentation should connect activities, costs, and business components.

What Employee Information Matters for Form 6765 Section G?

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.

How to Build a Business Component List for Section G

Building a business component list for Section G involves identifying all business components, organizing them by QREs, and prioritizing the largest components under the 80%/top-50 rule. The specific requirements should be verified against current instructions.