The IRS released a revised draft of Form 6765 (2024 year), Credit for Increasing Research Activities, for public comment. This update introduces and seeks comment on the new Business Component Detail section, which remains incredibly detailed for all taxpayers who file for the R&D credit starting with the 2024 tax year.

By Lydia Kreider 

The IRS revised and released for comment draft Form 6765, Credit for Increasing Research Activities, which taxpayers must file to claim the research credit under IRC Section 41. This revision alters the preview released by the IRS in September 2023 and requests additional feedback on the new Business Component Detail section, specifically asking whether this section should be optional for certain taxpayers.  

The IRS release IR-2024-171 includes Section G, the Business Component Detail, as optional for: 

  • (a) “qualified small business” taxpayers that claim a reduced payroll tax credit, and  
  • (b) taxpayers with total qualified research expenditures (QREs) of $1.5 million or less, and gross receipts of $50 million or less. 

The IRS further reduced the number of business components required to be reported on Section G. Taxpayers should report 80% of total QREs in descending order by amount per business component, up to 50 business components. 

The amount of information required related to the business components on Section G has also been reduced as well as the selections for the type of business component. Definitions for officers, controlled group reporting and business component names are expected to be clarified in accompanying instructions and released at a later date. 

The revised Section G will be optional for all filers for tax year 2024 and will become effective for tax year 2025. 

For more guidance on handling Form 6765, reach out to your TaxOps advisor.  

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