The IRS announced it will extend the comment period for feedback on the draft Form 6765 instructions through March 31, 2026, to allow more time for stakeholder input on the new research and development tax credit reporting requirements. The agency also made Section G of the form optional for all filers for tax year 2025, responding to stakeholder requests for more time to adapt to the changes.
The decision comes after the IRS received significant feedback from external stakeholders requesting additional time to review and comment on the proposed changes to Form 6765, which is used to claim the Credit for Increasing Research Activities. “After considering the feedback, the agency has decided to extend the comment period for the draft instructions through March 31, 2026, to alleviate taxpayer burden and in the interest of fair and effective tax administration,” the IRS stated in its announcement.
The extension affects businesses across industries that invest in research and development activities and claim federal tax credits for those expenditures. According to the IRS, the extension reflects its response to stakeholder concerns and is intended to give companies more time to review and prepare for the revised reporting requirements.
Interested parties can submit feedback about the Form 6765 Instructions to lbi.rt.team@irs.gov using the subject line “Instructions for Form 6765.” The IRS expects to release revised form instructions for tax year 2025 in January 2026.
Changes to Section G Requirements
While the IRS continues gathering stakeholder input, Section G of Form 6765 will remain optional for all filers for tax year 2025. This section requires detailed business component reporting that many companies found challenging to complete within the original timeframe.
Starting with tax year 2026, Section G will become mandatory for most filers. However, two categories of taxpayers will continue to have optional reporting:
- Qualified small business taxpayers who elect to claim a reduced payroll tax credit.
- Taxpayers with total qualified research expenses of $1.5 million or less and gross receipts of $50 million or less.
The qualified small business designation is defined in section 41(h)(3) of the Internal Revenue Code and typically applies to startups and smaller companies that may not have the same resources to prepare extensive documentation required in detailed reporting sections.
Extended Transition Period for Credit Claims
The IRS also extended the research credit claim transition period through January 10, 2027. During this period, taxpayers have 45 days to perfect a research credit claim for refund after the IRS makes its initial determination on the claim.
For research credit refund claims postmarked after June 18, 2024, taxpayers must provide specific supporting information, including:
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Identification of all business components related to the Section 41 research credit claim.
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A list of all research activities performed for each business component.
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Total qualified employee wage expenses, supply expenses, and contract research expenses for the claim year.
According to the IRS, the transition period is intended to give taxpayers additional time to compile the documentation needed to support their research credit claims. Companies can use Form 6765 to provide this information, though the IRS has indicated that alternative formats may also be acceptable if they contain the required details.
Business Timeline and Compliance Considerations
The IRS stated that the extensions are intended to ease the transition for businesses preparing for the new reporting requirements. Many companies had raised concerns about their ability to compile the detailed information required under the revised form, particularly the business component analysis required in Section G.
The changes reflect the IRS’s ongoing efforts to improve compliance and data quality for research credit claims while balancing the administrative burden on taxpayers. The agency has been working to address what it views as insufficient documentation in some R&D credit claims while ensuring legitimate claims can proceed without unnecessary obstacles.
According to the IRS, business owners and tax professionals now have additional time to review the draft instructions and provide feedback on how the new requirements may affect their operations. The extended timeline also allows companies to prepare their internal processes and documentation systems for the eventual mandatory reporting requirements.
The IRS previously released draft Form 6765 in June 2024 and draft instructions in December 2024, with the current announcement representing the agency’s response to the feedback received from the business community.
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