IRS Seeks Extended Feedback on Form 6765 for Research Credit

What's Happening?

The Internal Revenue Service (IRS) is extending the feedback period for the draft instructions of Form 6765, which pertains to the Credit for Increasing Research Activities, commonly known as the research credit. This extension comes after stakeholders requested more time to provide input on the draft instructions initially published last year. The IRS has set the new deadline for feedback submissions to March 31. Interested parties can send their comments via email to the IRS. The agency plans to release revised instructions for the 2025 tax year in January 2026. Additionally, Section G of Form 6765 will be optional for all filers in 2025 but will become mandatory in 2026, with some exceptions for small businesses and taxpayers with specific research expenses.

Why It's Important?

The extension of the feedback period for Form 6765 is significant as it allows more stakeholders to contribute to the refinement of the research credit instructions, potentially impacting how businesses claim this credit. The research credit is a vital incentive for companies investing in innovation and development, and clear, well-structured instructions can facilitate compliance and maximize the credit's benefits. This development is particularly relevant for small businesses and companies with substantial research activities, as it could influence their tax planning and financial strategies. The IRS's decision to extend the transition period for research credit claims also provides taxpayers with additional time to ensure their claims are accurate and complete, potentially reducing disputes and enhancing the efficiency of the tax filing process.

What's Next?

The IRS will continue to collect feedback until the March 31 deadline, after which it will review the comments and incorporate necessary changes into the final instructions. The revised Form 6765 instructions are expected to be released in January 2026, ahead of the 2025 tax filing season. Taxpayers and tax professionals should prepare for the upcoming changes, particularly the mandatory reporting requirements for 2026, to ensure compliance and optimize their research credit claims. Stakeholders may also anticipate further guidance from the IRS on the implementation of these changes.