The IRS has introduced significant changes to the R&D Tax Credit Form 6765, which will apply to tax years beginning in 2024. The new draft version of the form includes several revisions that will impact how businesses claim and substantiate their R&D tax credits.
One of the most notable changes is the addition of Section G, which requires businesses to provide detailed information about their research activities. This includes whether the business component is new or improved, if it is for sale, lease, or license, and a narrative describing what information is sought to be discovered. This new section will be optional for:
Qualified start-up businesses electing the payroll offset under I.R.C. § 41(h)(1) & (2); and
Taxpayers with total annual Qualified Research Expenditures (QREs) of $1.5M or less and $50M or less in annual revenue,
The new draft Form 6765 also includes several other new sections, such as sections E and F, which request additional information about the research activities and the business's operations.
These changes represent some of the most significant revisions to the R&D tax credit program since its inception in 1981. Businesses and tax professionals should stay informed about these developments and be prepared to adapt to the new requirements when claiming R&D tax credits for the 2024 tax year and beyond.
The new draft Form 6765 can be found at https://www.irs.gov/pub/irs-dft/f6765--dft.pdf.