The IRS is giving businesses more time to weigh in on the draft instructions for Form 6765, Credit for Increasing Research Activities (better known as the research & development R&D tax credit). If your business claims this credit, or plans to, you’ll want to pay attention to these timeline changes and new reporting options.

What is the R&D tax credit and Form 6765?

The Research & Development (R&D) tax credit is for businesses of any size that design, develop or improve products, processes, techniques, formulas, or software. It is calculated on the basis of increases in research activities and expenditures, and is intended to reward, in general, those that pursue innovation with continually increasing investments.

Form 6765 is the IRS form businesses use to claim this credit. It requires details about the research activities performed, the employees involved, and the associated expenses. For many businesses, especially those with multiple projects or divisions, completing Form 6765 accurately can be complex, so staying on top of IRS updates is crucial.

Public Comment Period Extended

After receiving feedback from stakeholders, the IRS has extended the public comment period for the draft Form 6765 instructions through March 31, 2026. This extra time is intended to reduce taxpayer burden and support fair administration of the credit.

How do you submit feedback?

If you have suggestions or concerns, you can email them to lbi.rt.team@irs.gov with the subject line “Instructions for Form 6765.” The IRS plans to release the finalized instructions in January 2026, in time for 2025 tax returns (processed in 2026).

Form 6765 Section G Reporting: Optional for 2025

Section G of Form 6765 was originally going to require more detailed reporting starting with tax year 2025. However, the IRS has announced that Section G will be optional for all filers for that year.

Starting with tax year 2026 (processing year 2027), Section G will become mandatory for most taxpayers. There will be limited exceptions for:

• Qualified small businesses claiming a reduced payroll tax credit, and
• Taxpayers with $1.5 million or less in qualified research expenses and $50 million or less in gross receipts.

These taxpayers will have the option to provide Section G data, but it is not required.

Extended Transition Period for Refund Claims

The IRS has also extended the research credit claim transition period through January 10, 2027. During this time, taxpayers will have 45 days to perfect a research credit refund claim before the IRS issues a final determination.

To make a valid claim, you must:

• Identify all business components tied to the credit,
• Describe the research activities for each component, and
• Provide total qualified wage, supply, and contract research expenses for the year.

You can use Form 6765 to supply this information.

What do these changes mean for businesses?

These changes buy businesses and advisors more time to adjust to the IRS’s expanded reporting expectations for the research credit. For companies claiming or planning to claim the credit, it’s a good idea to:

• Review your recordkeeping practices for research activities and expenses,
• Coordinate with your tax team to ensure you can capture Section G data accurately, and
• Consider submitting feedback if you see challenges or unclear instructions.

Key Dates to Remember

• Comment period ends: March 31, 2026
• Final instructions released: January 2026
• Section G optional: Tax year 2025
• Section G mandatory: Tax year 2026 and beyond (with exceptions)
• Transition period for refund claims: Extended through January 10, 2027

FAQ

1. What is the R&D tax credit? It’s a federal credit that rewards businesses for investing in research and development, including improving products, processes, or software.
2. What is Form 6765? It’s the IRS form used to claim the R&D tax credit and report details on research activities, employees, and expenses.
3. Is Section G reporting required for 2025? No, Section G is optional for tax year 2025.
4. When does Section G become mandatory? For most taxpayers, Section G reporting is required starting with tax year 2026, with some exceptions for smaller businesses.
5. How long do I have to perfect a refund claim? The IRS has extended the transition period through January 10, 2027, giving taxpayers 45 days to finalize claims before a final determination.

The IRS is taking a phased approach to Form 6765 changes, giving taxpayers extra time to adapt. Even if the Section G reporting is optional next year, it’s smart to start preparing now so you’re not scrambling in 2026.