There is no application and no pre-registration for the federal research credit. The claim is Form 6765, filed with the income tax return, and the work is in what sits behind the form: a defensible list of business components, a measured set of qualified research expenses, and a calculation under one of two methods. This page follows the five steps the academy teaches, then the forms and what follows filing.
Before you start
Three decisions shape the claim before any number is calculated.
- Which entity claims. The entity that pays or incurs the expenses. Corporations, partnerships, S corporations, individuals, estates and trusts can claim; partnerships and S corporations pass the credit through to their partners and shareholders. Related entities under common control are treated as one taxpayer for the computation.
- Which year's rules. The business component information in Section G of Form 6765 is required for tax years beginning after 2025, with some exceptions, so a claim for a 2026 calendar year is prepared differently from a 2025 one.
- Whether the credit can be used. The credit is not refundable. A company with no tax to pay carries it forward, or, if it is a qualified small business, elects to apply up to US$500,000 a year against payroll tax using Form 8974.
Step by step
- Identify qualified research. Test each business component against the four-part test and record the result. The record is a short statement per component covering the uncertainty, the experimentation and the technological basis, written before anyone calculates anything.
- Gather qualified research expenses. Wages, supplies and 65% of contract research costs, linked to the qualifying work. Wages are allocated by the time each employee spent performing, directly supervising or directly supporting the research.
- Choose a method. Regular credit or alternative simplified credit, and decide whether to elect the reduced credit under section 280C(c). The method and the election are both made on the original return and affect the deduction for research expenses as well as the credit.
- Complete Form 6765. Including Section G business component information where it applies. The form takes the method, the QREs, the current year credit and the payroll tax election in separate sections.
- File with the return. Attach Form 6765 to the income tax return. Qualified small businesses make the payroll tax election on a timely filed original return, including extensions, then claim on Form 8974.
Forms and channels
| Form | Who files it | What it does |
|---|---|---|
| Form 6765 | Every claimant | Computes the credit under the regular or alternative simplified method, records the section 280C(c) election, the payroll tax election and, for tax years beginning after 2025, the business component information in Section G |
| Form 3800 | Claimants using the credit against income tax | Combines the research credit with the other general business credits and applies the limitation on how much credit can be used in the year |
| Form 8974 | Qualified small businesses that elected the payroll tax offset | Applies the elected amount against payroll tax on the quarterly employment tax return, starting with the first quarter after the income tax return is filed |
| Schedule K-1 | Partnerships and S corporations | Passes each owner's share of the credit through to their own return |
| Form 1120-X, 1040-X or 1065 amended return | Claimants adding or correcting a credit for a filed year | Refund claims must include specific information about the business components and expenses, described on the deadlines page |
Form 6765 itself is organised in lettered sections. Section A computes the regular credit, Section B the alternative simplified credit, Section C the current year credit after the section 280C(c) election, Section D the payroll tax election, and Sections E, F and G collect other information, the QRE summary and the business component detail. The Form 6765 page describes each section line by line.
After filing
Using the credit. Credit that cannot be used in the year because of the general business credit limitation is carried back one year and forward twenty. A first-year claimant with no prior tax to absorb a carryback simply carries the credit forward.
The deduction. Unless the reduced credit is elected, the deduction for research expenses is reduced by the amount of the credit, which is the reason the 280C(c) election exists; the section 174 page shows the arithmetic.
Examination. Returns can be selected for examination within the limitation period, normally three years from filing. The documentation that supported the claim should be kept at least that long, and longer where the credit is carried forward, because a carryforward used in a later year can be examined when that later year is examined.
Illustrative example
Brightwater Foods, a hypothetical food manufacturer with a calendar tax year, develops a new shelf-stable sauce in 2026. Its qualifying costs are US$300,000 of wages and US$40,000 of supplies. It has claimed before, so its prior three years' QREs average US$280,000.
| Step | What Brightwater does |
|---|---|
| 1 Identify | Two business components pass the four-part test (the sauce formulation and the retort process); one, a label redesign, fails and is left out |
| 2 Gather | QREs of US$340,000 from time records and material usage |
| 3 Method | Alternative simplified credit: 14% of QREs above 50% of the three-year average, that is 14% of (US$340,000 less US$140,000) = US$28,000; the reduced credit is elected |
| 4 Form 6765 | Section B for the credit, Section C for the election, Section G for the two business components |
| 5 File | With Form 1120 by the due date, including extensions; the credit flows through Form 3800 |
The arithmetic of the alternative simplified credit and the regular credit, including what happens when there are no prior-year expenses, is on the calculation method page.
Related pages
Official sources
- Instructions for Form 6765, Credit for Increasing Research ActivitiesInternal Revenue Service
- About Form 6765Internal Revenue Service
- About Form 8974, Qualified Small Business Payroll Tax Credit for Increasing Research ActivitiesInternal Revenue Service
- Instructions for Form 3800, General Business CreditInternal Revenue Service
Educational content only, not tax advice. See the disclaimer.