Form 6765 Just Got a Redesign: What Section G Means for Your R&D Credit

TL;DR

• The IRS redesigned Form 6765, the form used to claim the R&D credit. The new Section G, which requires project-level detail, is optional for tax year 2025 and generally mandatory starting in tax year 2026.
• Many growing companies may be exempt: qualified small businesses electing the payroll tax offset, and filers with qualified research expenses of $1.5 million or less and gross receipts of $50 million or less claiming on an originally filed return.
• Exempt or not, the message from the IRS is clear. Project-level documentation is becoming the standard, and companies that build it as they go will be in the strongest position.

The federal R&D tax credit itself has not changed. How you report it is changing in a meaningful way, and the transition is happening now. The IRS has redesigned Form 6765, the form every business uses to claim the credit under Section 41 of the Internal Revenue Code, and the centerpiece of that redesign, a new Section G, moves from optional to mandatory for most filers beginning with tax year 2026. If your company claims the credit, or has been thinking about it, this is worth ten minutes of your attention.

What Section G actually asks for

Historically, Form 6765 let a business report its qualified research expenses in aggregate: one set of totals for wages, supplies, and contract research. Section G changes that. It asks filers to break the claim down by business component, meaning the specific products, processes, or software the research relates to, and for each one to describe the research activities and the information the company sought to discover, along with a breakdown of the expenses. Under the current IRS instructions for Form 6765, filers generally report components in descending order of cost until they have covered the bulk of their expenses, subject to a cap on the number of components.

In plain terms: the IRS wants the return itself to show the connection between what you spent and what you were building. That connection has always been the substance of a defensible claim under Treasury Regulation 1.41-4. What is new is that it now gets disclosed up front rather than assembled later if the IRS asks.

The timeline

The IRS has phased this in, and the transition relief it announced gives filers a grace year. For tax year 2025, Section G is optional for everyone. For tax years beginning in 2026 and later, it is generally required. Timing details can continue to evolve, so treat the IRS instructions in effect for your filing year as the controlling word.

Who can skip Section G

This is the part most relevant to growing companies, because the exemptions are aimed squarely at businesses that are not enterprise-scale. Starting with tax year 2026, two groups may skip Section G. The first is qualified small businesses, generally younger companies under the gross receipts tests of Section 41(h), that elect to apply the credit against payroll tax. The second is filers whose total qualified research expenses are $1.5 million or less, measured at the control group level, and whose gross receipts are $50 million or less, provided the credit is claimed on an originally filed return.

Many companies in the $3 million to $15 million revenue range may fall inside that second exemption. Two details deserve attention, though. The thresholds are measured across related entities, so a company with common ownership structures should confirm where the group as a whole lands. And the exemption applies to originally filed returns. A claim made by amending a prior-year return does not get the same pass, which is one more reason that planning the credit into your current-year filing tends to be cleaner than reaching back later.

Why this matters even if you are exempt

It can be tempting to read the exemption thresholds and file this under "not my problem." That would miss the signal. Separate from Section G, refund claims involving the research credit already must include the same core elements, the business components, the activities, and the expense breakdown, under requirements that have applied to claims filed since mid-2024. The direction of travel is unmistakable: the IRS increasingly expects R&D claims to be organized by project, supported by records that tie expenses to activities, whether or not that detail appears on the form itself.

Companies that treat documentation as an afterthought will feel this shift as pressure. Companies that build the record as the work happens will barely notice it. The habits are the same ones that have always supported a strong claim: knowing which projects involved technical uncertainty, tracking whose time went where, and keeping the design notes, test results, and iterations that show a process of experimentation.

What to do between now and your 2026 filing

The grace year is an opportunity. Even filers who expect to be exempt can use tax year 2025 as a dry run: identify your business components, sketch the activity descriptions, and see how cleanly your existing records map expenses to projects. If the mapping is messy, it is far easier to fix prospectively than to reconstruct under deadline.

This is also where working with a specialist earns its keep. Strata's engagements are built around exactly this discipline. The deliverable is a documentation package designed to support the claim at the project level, the level the IRS is now writing onto the form itself. Most of the effort sits with our team rather than yours, a typical study runs on the order of four to eight weeks depending on complexity, and we work directly with your CPA so the credit and its support land cleanly in your filing. Finding out whether it makes sense for your company starts with a $0 initial assessment.

The redesigned form does not make the R&D credit harder to earn. It rewards the companies that can show their work. If you would like to know where your claim stands before the new rules reach you, contact Strata for a no-cost assessment.

This post is for informational purposes only and does not constitute tax or legal advice. Consult a qualified tax professional regarding your specific circumstances.