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General Instructions

Purpose of Form

Use Form 6765 to figure and claim the credit for increasing research activities (research credit).

Who Must File

An individual, estate, trust, organization, or corporation claiming a credit for increasing research activities; or any S corporation, partnership, estate, or trust that allocates the credit to its shareholders, partners, or beneficiaries must complete this form and attach it to its income tax return. See the instructions for line 41 if allocating the credit.

Qualified Research

The research credit is generally allowed for qualified research. Qualified research means research for which expenditures may be treated as section 174 expenses. This research must be undertaken for discovering information that is technological in nature, and its application must be intended for use in developing a new or improved business component of the taxpayer. In addition, substantially all of the activities of the research must be elements of a process of experimentation relating to a new or improved function, performance, reliability, or quality.

The research credit generally is not allowed for the following types of activities.

  • Research conducted after the beginning of commercial production.

  • Research adapting an existing product or process to a particular customer's need.

  • Duplication of an existing product or process.

  • Surveys or studies.

  • Research relating to certain internal-use computer software.

  • Research conducted outside the United States, Puerto Rico, or a U.S. possession.

  • Research in the social sciences, arts, or humanities.

  • Research funded by another person (or governmental entity).

If you incur qualified clinical testing expenses relating to drugs for certain rare diseases, you may elect to claim the orphan drug credit for these expenses instead of taking the research credit. See Form 8820, Orphan Drug Credit.

See section 41 and Regulations sections 1.41–2 and 1.41–4 for other definitions and special rules.

Special Rules

See section 41(f) and Regulations section 1.41 for special rules related to:

  • Aggregation of expenditures for members of controlled groups and businesses under common control;

  • Allocation of the credit by partnerships, estates, and trusts;

  • Adjustments, if a major portion of a business is acquired or disposed of; and

  • Short tax years.

For special rules concerning the allocation and apportionment of research and experimental expenditures between U.S. and foreign source income, see sections 861 through 864.

Additional Information

See section 41 and Regulations section 1.41 for more details.