Summary: The IRS released the final updated instructions for Form 6765 on February 6, 2026. The revised instructions address changes to the treatment of §174A domestic research expenditures and aim to align with prior IRS guidance and clarifications on reporting requirements.
Form 6765 Continues to Evolve
The final instructions for Form 6765, used to claim the federal R&D tax credit, reflect several changes that help to align form instructions with changes introduced by the One Big Beautiful Bill (OBBB) as well as clarifications previously issued by the IRS. These final instructions are the latest in a series of changes after the IRS first proposed a substantially new version of Form 6765 in 2023. Taxpayers are required to use the new form and instructions for the 2025 tax year, although Section G remains optional for all taxpayers for 2025.
Noteworthy changes
The changes reflected in the newest iteration of the form instructions largely pertain to aligning with the OBBB or updating specific references to the tax code in regard to reporting business components, filing amended claims, and reflecting controlled groups.
- Aligning with the OBBB:
- New “domestic research and experimental expenditures” section explains code section §174A and how taxpayers can deduct, capitalize, or amortize these expenditures
- Expanded definition of Qualified Research Expenditures (QREs) references §174A using language consistent with §41
- Added language consistent with changes to the §280C election made under the OBBB
- Updates to Section G, Amended Claims, and “Special Rules”
- Clarification that expanded business component-level reporting under Section G is optional for all taxpayers for the 2025 tax year and will be mandatory for all taxpayers for the 2026 tax year (with the exception of eligible small filers).
- Removed language referencing the previous Chief Counsel Memorandum (CCM) that introduced new filing requirements for amended claims while adding language instructing taxpayers filing amended claims to follow Section G instructions for amended returns; however, Section G remains optional for all taxpayers for the 2025 tax year, so taxpayers should continue to follow the CCM requirements, explained in this article.
- Incorporation of previous IRS clarification on controlled group reporting requirements, but a disconnect between the instructions and the computation mechanics for some controlled groups remains unaddressed.
Impact to Taxpayers
The new 6765 (required beginning for the 2024 tax year) adds significant complexity to the credit claim process by increasing both the quantitative and qualitative information required on the tax return. These revised instructions directly influence the computation and reporting of federal R&D tax credits, so taxpayers should rely on a trusted and experienced advisor to assist in calculating and documenting their credits.
The new form and its revised instructions reflect a changing landscape for the R&D tax credit in which the IRS is signaling increasing emphasis on compliance with qualification and documentation requirements. The OBBB adds additional complexity to these considerations as taxpayers must also navigate how to address §174 compliance obligations and whether it is appropriate to revisit the tax treatment of §174 expenditures for previous tax years, as discussed in this article.
Understanding What Is and Is Not Required
Since the IRS introduced the first proposed new Form 6765, there have been many iterations of the form’s requirements and instructions.
Here’s a quick recap on where those requirements stand for the 2025 tax year:
- The new Form 6765 is required for all taxpayers.
- Section G is optional for all taxpayers.
- Taxpayers filing amended returns should follow the instructions detailed in the IRS CCM, which requires taxpayers to list each business component included in the credit computation, detail the qualifying activities that occurred for each business component, and report the QREs included in the credit computation.
Here’s a reminder of what will change for the 2026 tax year:
- Section G will become mandatory for all taxpayers, with the exception of those that meet the exemption criteria.
- Taxpayers exempt from Section G include Qualified Small Businesses that meet all of the following criteria:
- Using the credit to reduce payroll taxes,
- Have total QREs of $1.5M or less, determined at the controlled group level, and
- Have gross receipts of $50M or less for the prior three tax years.
- Taxpayers filing an amended return to claim the R&D tax credit will be required to complete Section G regardless of exemption criteria.
Final thoughts
The changes included in the final instructions for Form 6765 don’t reflect any major new changes in the filing requirements to claim the R&D credit, but the new form still reflects a significant shift in the amount of quantitative and qualitative information required at the time of filing.
In combination with the changes introduced by the OBBB, computing the R&D credit is now more complex with a wider range of business factors that could impact businesses’ holistic tax strategies.
