Form 6765: Who Files the Research Credit, and the Elections on It
Published November 7, 2026
Form 6765 is used to figure and claim the credit for increasing research activities. The Instructions for Form 6765 (Rev. December 2025) also cover two elections on the same form. One is the reduced credit election under section 280C. The other is the payroll tax election. This post is general information.
Who has to file the form
Partnerships and S corporations must file Form 6765 to claim the credit. Most other taxpayers do not have to complete it. That is true when their only source of the credit is a partnership, an S corporation, an estate, or a trust. Those taxpayers report the credit directly on Form 3800.
An estate or trust can pass the credit to its beneficiaries. The Schedule K-1 (Form 1041) instructions explain this in box 13.
What counts as qualified research
The instructions describe a four-part test. Qualified research must meet all four parts:
- It is domestic research or experimental spending under section 174A.
- It seeks information that is technological in nature.
- It aims to develop a new or improved business component.
- Most of its activities are a process of experimentation. The goal is a new or improved function, performance, reliability, or quality.
The test applies separately to each business component.
Internal use software qualifies only in some cases. The research must be qualified research and not otherwise excluded. It must also pass the high-threshold-of-innovation test. The instructions say the taxpayer must be able to show three things. The software is innovative. Its development involves significant economic risk. It is not commercially available for the taxpayer to buy, lease, or license and use as intended.
Research spending and the 2025 law change
The instructions say P.L. 119-21 added section 174A. That law is often called the One Big Beautiful Bill Act. For tax years beginning after 2024, a taxpayer can deduct domestic research and experimental spending.
A taxpayer can also elect to capitalize that spending. It then amortizes the amount over at least 60 months. The instructions point to section 70302(f) of P.L. 119-21 and Rev. Proc. 2025-28 for transition options. Those options cover amounts capitalized in earlier years.
The section 280C election
The section 280C election is made at the top of Form 6765, on Item A. Check "Yes" to elect the reduced credit. Check "No" to decline it. The election is made on the original timely filed return, including extensions.
The payroll tax election
A qualified small business can apply part of the research credit against its payroll tax. The instructions say the maximum is $500,000. The election is made on the form.
Section G and amended returns
Section G is the business component information section. The instructions say it is optional for tax years beginning before 2026. For tax years beginning after 2025, Section G is required, under the guidelines in the instructions.
A claim for a credit on an amended return needs specific information to be valid. The instructions describe that information under Research Credit Claims on Amended Returns.
Records to keep
Keep records that show the research spending. Good records describe the project, the work done, the people involved, and the costs. The credit depends on the facts of each business component, so these records support each claim.
A taxpayer that makes the section 280C election should keep a copy of the return that shows Item A. The election is made on the original timely filed return.
Where this fits
Form 6765 flows into the general business credit. That credit is combined with other business credits on Form 3800. See Form 3800: How Business Credits Are Combined. A partner or shareholder who gets the credit from a pass-through entity should read the owner's Schedule K-1 first. See Schedule K-1 From a Partnership: The Basics.
Sources: Sources: IRS, Instructions for Form 6765 (Rev. December 2025), Credit for Increasing Research Activities (https://www.irs.gov/pub/irs-pdf/i6765.pdf) This is general information, not advice about your specific return.
More guides on: Tax credits and deductions
