February 23, 2026
The IRS has finalized instructions for Form 6765, the form businesses use to claim the federal R&D tax credit under Section 41. The credit rules have not changed, but the updated form requires more detail across key areas, with staggered implementation dates. The IRS says the added disclosures are intended to increase transparency and help identify higher-risk claims. For business owners, the R&D tax credit is still a valuable opportunity; however, the updated form will likely require more careful record-keeping and coordination. To help clients, prospects, and others, Wilson Lewis has provided a summary of the key details below.
The federal R&D tax credit is designed to reward businesses that invest in qualified research activities in the United States. More specifically, it is meant for companies that are trying to improve a product, process, or software and have to work through technical uncertainty to get there.
To qualify for the credit, a business still needs to meet the four-part test. The work must be tied to a business component, which the IRS now clearly defines as a product, process, software, technique, formula, or invention used in the business. The credit is calculated using qualified research expenses (QREs). These commonly include wages for employees doing the work, certain supplies, and certain contractor costs tied to the qualified activities.
Businesses claiming the federal R&D tax credit under Section 41 must use the updated Form 6765 for 2025 returns (filing in 2026). The eligibility rules have not changed, but as noted, the form now requires more information at filing. The additional information is disclosed in the following,
Section E — This section is new to the form, and it’s required for 2025 filings. This section adds high-level disclosures that give the IRS more context about what is driving the credit. It includes items such as the total number of business components, the amount of officer wages included in QREs, yes/no disclosures on items such as acquisitions or dispositions, new categories of expenses, and use of the ASC 730 Directive safe harbor.
Section G — This section is optional for the 2025 tax year, but it is expected to be mandatory for most filers starting with 2026. This is the biggest reporting change in the updated Form 6765 instructions. It moves the form from summary-level reporting toward business component reporting.
Taking a look at the form, Section G requires taxpayers to itemize QREs by business component. The reporting follows a top-components approach, with components listed in descending order of cost until the total reaches 80% of QREs or 50 components, whichever comes first. Businesses will likely need a way to identify and rank the components driving most of the credit.
It also asks for a more detailed breakout of wage-based QREs using three categories that align with how people are involved in the work: 1) performance of research, 2) supervision of research, and 3) support of research. This allows the IRS to see exactly how wages factor into the claim.
Some businesses may be exempt from Section G. For example, qualified small businesses that elect to apply the credit against payroll taxes are generally exempt from completing this section. The instructions also describe an exemption tied to thresholds such as $1.5 million or less in QREs and $50 million or less in gross receipts.
Amended returns and refund claims face stricter expectations. Even before Section G becomes mandatory, businesses filing amended returns to claim the credit should expect to provide the same kind of business component-level detail the IRS is moving toward on the updated form.
The final Form 6765 instructions also include updates tied to OBBBA and recent IRS guidance, with specific references to Section 174A and the Section 280C election. Section 174A addresses how domestic research and experimental (R&E) costs are treated for deduction purposes. Section 280C addresses how the R&D credit affects related deductions.
This means businesses claiming the credit need consistent documentation across the return so the credit calculation, deduction treatment, and supporting records all align.
Businesses are encouraged to develop a system to capture the information that is now required to support a R&D tax credit claim. Suggestions typically include:
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The R&D credit is still a tax-saving opportunity for many businesses. However, the updated Form 6765 instructions require more structured reporting and clearer links between activities, components, and costs. To continue benefiting from the credit, businesses will need to understand and accommodate the stricter reporting requirements. If you have questions about the information outlined above or need assistance with another tax or accounting issue, Wilson Lewis can help. For additional information call 770-476-1004 or click here to contact us. We look forward to speaking with you soon.