The most significant change to Form 6765 is a new Section G that asks businesses claiming the R&D tax credit to report qualified research expenses (QREs) by individual business components and to split wages into direct research, supervision, and support. Section G is optional for the 2024 and 2025 tax years and becomes mandatory for most filers starting with tax years that begin in 2026. If your company claims the credit, the way you identify, track, and document projects throughout the year now carries more weight than it used to.
What’s Changing on Form 6765?
For most of its 40-year history, Form 6765 collected numbers, not narratives. The revised form changes that. The IRS released the final 2024 version in February 2025 and added three sections that expand what you report at filing. Section E gathers additional details such as the number of business components generating QREs and the amount of officer wages in the claim. Section F summarizes total QREs. Section G carries the bulk of the new work, asking for qualitative and quantitative detail on each business component behind the credit. The result is a filing that looks much closer to what an examiner would request during an audit.
What Section G Requires
Section G asks you to describe the research behind your credit component by component, rather than reporting one combined figure. The details fall into a few clear areas.
Reporting QREs by Business Component
You report each qualifying business component by name and by type, such as a product, process, software, formula, invention, or technique, along with the QREs tied to it. Many companies will need to rethink how they define and track components, because internal project structures often do not line up with how the IRS wants them reported. Mapping your work to clean, defensible components is worth doing early.
The Direct Research, Supervision, and Support Wage Breakdown
Wages no longer travel as a single number. Section G separates them into direct research, direct supervision, and direct support. That split gives the IRS a clearer view of how labor costs are distributed, and it can invite closer review when supervision or support wages make up a large share of total QREs. Companies that lean heavily on those categories should be ready to explain why the work qualifies.
The 80 Percent and 50-Component Limits
You do not report every component. Section G asks for the components that make up 80% of total QREs, listed in descending order by QRE amount, capped at 50 components. Because you report the same kinds of components year after year, consistent definitions and naming conventions matter. Changing how you label or group components from one year to the next creates consistency risk across tax years and raises questions you would rather avoid.
When the New Requirements Take Effect
Section G is optional for tax years 2024 and 2025 and mandatory for most filers for tax years beginning in 2026. The IRS built in the transition window so businesses could adjust their tracking and documentation before the section becomes required. Treating the optional years as practice, rather than waiting, puts you in a stronger position once filing is no longer a choice.
Which Filers Are Exempt From Section G?
Two groups of taxpayers do not have to complete Section G on an original, timely filed return. Qualified small businesses under Section 41(h)(3) that elect the reduced payroll tax credit are exempt. So are taxpayers with total QREs of $1.5 million or less, measured at the controlled group level, and gross receipts of $50 million or less under Section 448(c)(3). One caveat is worth noting. The exemption applies to original returns, so filing an amended return to claim a refund means providing the business component detail regardless of company size.
What the Expanded Disclosures Mean for Your Documentation
The IRS is now collecting structured business component data at the point of filing, which strengthens its ability to analyze claims and target audits over time. Loose or after-the-fact documentation becomes riskier in that environment. Naming conventions, component definitions, and the link between activities and expenses all need to hold up from year to year. Because the credit rewards ongoing work, an annual study helps keep that record consistent.
How to Prepare Before Section G Becomes Mandatory
Start by tracking qualifying activity as it happens instead of reconstructing it at tax time. Align your internal project structure with the business components you will report, and capture the wage split across research, supervision, and support as the year goes on. Contemporaneous records, gathered while the work is fresh, tend to be far more reliable than memory in the spring.
How Navatus Builds R&D Studies That Meet the New Requirements
Section G rewards businesses that document as they build. At Navatus, our R&D tax credit services are designed around the level of detail the new disclosures call for. We identify qualifying activities, interview the people who understand the technical work, and organize QREs by business component with the direct research, supervision, and support wages clearly allocated. We can work directly with your team or alongside your CPA firm, building audit-ready studies and keeping your documentation consistent from one year to the next.
The optional window will not last, and shaping your process now makes the mandatory years far easier to manage. Schedule a consultation with our team to see where your R&D credits are hiding.