Form 6765

Department of the Treasury 

Internal Revenue Service

Credit for Increasing Research Activities

▶ Attach to your tax return.

OMB No. 1545-0619

2010

Attachment 

Sequence No. 81

Name(s) shown on return Identifying number

Section A—Regular Credit. Skip this section and go to Section B if you are electing or previously elected (and are not revoking) the

alternative simplified credit.

1 Certain amounts paid or incurred to energy consortia (see instructions) . . . . . . . . . 1 

2 Basic research payments to qualified organizations (see instructions) . 2 

3 Qualified organization base period amount . . . . . . . . . . 3 

4 Subtract line 3 from line 2. If zero or less, enter -0- . . . . . . . . . . . . . . . . 4 

5 Wages for qualified services (do not include wages used in figuring the

work opportunity credit) . . . . . . . . . . . . . . . . 5 

6 Cost of supplies . . . . . . . . . . . . . . . . . . 6 

7 Rental or lease costs of computers (see instructions) . . . . . . 7 

8 Enter the applicable percentage of contract research expenses (see 

instructions) . . . . . . . . . . . . . . . . . . . . 8 

9 Total qualified research expenses. Add lines 5 through 8 . . . . . 9 

10 Enter fixed-base percentage, but not more than 16% (see instructions) . 10 % 

11 Enter average annual gross receipts (see instructions) . . . . . . 11 

12 Multiply line 11 by the percentage on line 10 . . . . . . . . . 12 

13 Subtract line 12 from line 9. If zero or less, enter -0- . . . . . . . 13 

14 Multiply line 9 by 50% (.50) . . . . . . . . . . . . . . . 14 

15 Enter the smaller of line 13 or line 14 . . . . . . . . . . . . . . . . . . . . 15 

16 Add lines 1, 4, and 15 . . . . . . . . . . . . . . . . . . . . . . . . . . 16 

17 Are you electing the reduced credit under section 280C? ▶ Yes No

If “Yes,” multiply line 16 by 13% (.13). If “No,” multiply line 16 by 20% (.20) and see the

instructions for the schedule that must be attached. Members of controlled groups or businesses

under common control: see instructions for the schedule that must be attached . . . . . . 17 

Section B—Alternative Simplified Credit. Skip this section if you are completing Section A.

18 Certain amounts paid or incurred to energy consortia (see the line 1 instructions) . . . . . . 18 

19 Basic research payments to qualified organizations (see the line 2 

instructions) . . . . . . . . . . . . . . . . . . . . 19 

20 Qualified organization base period amount (see the line 3 instructions) . 20

21 Subtract line 20 from line 19. If zero or less, enter -0- . . . . . . . . . . . . . . . 21

22 Add lines 18 and 21 . . . . . . . . . . . . . . . . . . . . . . . . . . 22 

23 Multiply line 22 by 20% (.20) . . . . . . . . . . . . . . . . . . . . . . . 23

24 Wages for qualified services (do not include wages used in figuring the 

work opportunity credit) . . . . . . . . . . . . . . . . 24 

25 Cost of supplies . . . . . . . . . . . . . . . . . . 25

26 Rental or lease costs of computers (see the line 7 instructions) . . . 26 

27 Enter the applicable percentage of contract research expenses (see the

line 8 instructions) . . . . . . . . . . . . . . . . . . 27 

28 Total qualified research expenses. Add lines 24 through 27 . . . . 28

29 Enter your total qualified research expenses for the prior 3 tax years. If 

you had no qualified research expenses in any one of those years, skip 

lines 30 and 31 . . . . . . . . . . . . . . . . . . . 29 

30 Divide line 29 by 6.0 . . . . . . . . . . . . . . . . . 30

31 Subtract line 30 from line 28. If zero or less, enter -0- . . . . . . 31

32 Multiply line 31 by 14% (.14). If you skipped lines 30 and 31, multiply line 28 by 6% (.06) . . . . 32 

For Paperwork Reduction Act Notice, see instructions. Cat. No. 13700H Form 6765 (2010)
Form 6765 (2010) Page 2 

Section B—Alternative Simplified Credit (continued). 

33 Add lines 23 and 32 . . . . . . . . . . . . . . . . . . . . . . . . . . 33

34 Are you electing the reduced credit under section 280C? ▶ Yes No

34 

If “Yes,” multiply line 33 by 65% (.65). If “No,” enter the amount from line 33 and see the line 17 

instructions for the schedule that must be attached. Members of controlled groups or businesses 

under common control: see instructions for the schedule that must be attached . . . . . .

Section C—Summary

35 Enter the portion of the credit from Form 8932, line 2, that is attributable to wages that were also 

used to figure the credit on line 17 or line 34 (whichever applies) . . . . . . . . . . . . 35 

36 Subtract line 35 from line 17 or line 34 (whichever applies). If zero or less, enter -0- . . . . . 36

37 Credit for increasing research activities from partnerships, S corporations, estates, and trusts . . 37 

38 Add lines 36 and 37. Estates and trusts go to line 39; partnerships and S corporations, report this

amount on Schedule K; all others, report this amount on line 1c of Form 3800 . . . . . . . 38

39 Amount allocated to beneficiaries of the estate or trust (see instructions) . . . . . . . . . 39

40 Estates and trusts: subtract line 39 from line 38. Report the credit on line 1c of Form 3800 . . . 40

Form 6765 (2010)

General Instructions

Section references are to the Internal 

Revenue Code unless otherwise 

noted.

Purpose of Form

Use Form 6765 to figure and claim the 

credit for increasing research activities.

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. If you are a 

taxpayer that is not a partnership or 

S corporation, and your only source of 

this credit is from a partnership, 

S corporation, estate, or trust, you are 

not required to complete or file this 

form, with the following exception: you 

are a taxpayer that is an estate or trust 

and the credit can be allocated to 

beneficiaries. For more details, see the 

Instructions for Form 1041, Schedule 

K-1, box 13.

Note. Corporations filing an amended

return to claim a credit or refund of the

research credit, see Notice 2008-39,

I.R.B. 2008-13 684, available at 

http://www.irs.gov/irb/2008-13_IRB/

index.html for information on where to

file.

Qualified Research

The research credit is generally 

allowed for expenses paid or incurred 

for qualified research. Qualified 

research means research 

for which expenses 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 internaluse 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 can elect to claim 

the orphan drug credit for these 

expenses instead of 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 

sections 1.41-6, 1.41-6T, and 1.41-7 

for special rules related to:

• Aggregation of expenses 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 expenses 

between U.S. and foreign source 

income, see sections 861 through 864.

Member of Controlled Group 

or Business Under Common 

Control

For purposes of figuring the credit, all 

members of a controlled group of 

corporations (as defined in section 

41(f)(1)(A) and (f)(5)) and all members of 

a group of businesses under common 
Form 6765 (2010) Page 3 

control (as defined in section 41(f)(1)(B)), 

are treated as a single taxpayer. Use 

Section A or B to figure the credit for the 

entire group, but enter only your share of 

the credit on line 17 or line 34, whichever 

applies. Attach a statement showing how 

your share of the credit was figured, the 

name and employer identification number 

or taxpayer identification number of the 

other members of the group, and the 

designated member. Write "See 

Attached" next to the entry space for line 

17 or line 34. 

If a member of a controlled group of 

corporations or businesses under 

common control has filed its return using 

a method different than that of the 

designated member, then that member 

should file an amended return to conform 

to the designated member's method.

For special rules regarding the election 

(or revocation of the election) of the 

alternative simplified credit in Section B 

by a controlled group of corporations, 

see Regulations section 1.41-9T.

Specific Instructions

You can:

• Claim the regular credit in Section A or

• Elect the alternative simplified credit in 

Section B.

You may want to figure your credit 

using both of the methods for which you 

are eligible to get the maximum credit 

allowed.

Once elected, the alternative simplified 

credit applies to the current tax year and 

all later tax years, unless you revoke the 

election. The revocation for the alternative 

simplified credit must be made on an 

original return filed by the due date 

(including extensions). See Regulations 

section 1.41-9T. The revocation of the 

alternative simplified credit may not be 

made on an amended return. To revoke a 

previous election of the alternative 

simplified credit, complete Section A.

Generally, any expenses used to 

calculate the qualifying therapeutic 

discovery project credit cannot be used 

when calculating the research credit. See 

the line 3 instructions for an exception.

Section A—Regular Credit

Skip this section and go to Section B if:

1. You are electing the alternative 

simplified credit or

2. You previously elected the 

alternative simplified credit and are not 

revoking the election on this return.

Line 1

Enter the amounts you paid or incurred to 

energy research consortia for energy 

research. Energy research does not 

include any research that is not qualified 

research. In general, an energy research 

consortium is any organization described 

in section 501(c)(3), exempt from tax 

under section 501(a), organized and 

operated primarily to conduct energy 

research, and not a private foundation. 

See section 41(f)(6) for further details.

Any amount included on line 1 cannot 

be included elsewhere on the return.

Line 2

Enter the amounts the corporation (not to 

include S corporations, personal holding 

companies, and service organizations) 

paid in cash, under a written contract, for 

basic research to a qualified university, 

scientific research organization, or grant 

organization. See section 41(e) for details, 

including the definitions of qualified 

organizations.

Line 3

Enter the qualified organization base 

period amount based on minimum basic 

research amounts plus maintenance-ofeffort amounts for the three preceding tax 

years. See section 41(e) for details.

For purposes of determining the base 

period expenses, expenses used to 

calculate the qualifying therapeutic 

discovery project credit in a preceding 

year can be used to determine base 

period research expenses.

Line 7

Enter the amount you paid or incurred for 

the rental or lease of computers used in 

qualified research. The computer must be 

located off your premises and you must 

not be the operator or primary user of the 

computer. Reduce this amount by the 

amount that you (or any member of a 

controlled group of corporations or 

businesses under common control) 

received or accrued for the right to use 

substantially identical property.

Line 8

Enter the amounts you paid or incurred, 

subject to the following limitations.

• 100% of amounts you paid (or incurred) 

for qualified energy research performed 

by: an eligible small business, a 

university, or a federal laboratory (see 

section 41(b)(3)(D) for definitions of those 

entities). Also include payments to those 

same entities to the extent they are 

included as basic research payments in 

line 2, not to exceed the base period 

amount in line 3.

• 75% of amounts you paid (or incurred) 

for qualified research by a qualified 

research consortium (as defined by 

section 41(b)(3)(C)(ii)). Also include 75% 

of the payments to a qualified research 

consortium to the extent they are 

included as basic research payments in 

line 2, not to exceed the base period 

amount in line 3.

• 65% of amounts you paid (or incurred) 

for all other qualified research by any 

other person. Also include 65% of the 

payments to that person to the extent 

they are included as basic research 

payments in line 2, not to exceed the 

base period amount in line 3.

Note. Prepaid contract research

expenses are considered paid in the year 

the research is actually done.

Line 10

The fixed-base percentage depends on 

whether you are an existing company or a 

start-up company.

A start-up company is a taxpayer that 

had both gross receipts and qualified 

research expenses either:

• For the first time in a tax year beginning 

after 1983, or

• For fewer than 3 tax years beginning 

after 1983 and before 1989.

The fixed-base percentage for a startup company is figured as follows.

• For the first 5 tax years beginning after 

1993 for which you have qualified 

research expenses, the percentage is 

3%.

• For the 6th tax year beginning after 

1993 for which you have qualified 

research expenses, divide the aggregate 

qualified research expenses for the 4th 

and 5th such tax years by the aggregate 

gross receipts for those tax years, then 

divide the result by 6.

• For the 7th tax year beginning after 

1993 for which you have qualified 

research expenses, divide the aggregate 

qualified research expenses for the 5th 

and 6th such tax years by the aggregate 

gross receipts for those tax years, then 

divide the result by 3.

• For the 8th tax year beginning after 

1993 for which you have qualified 

research expenses, divide the aggregate 

qualified research expenses for the 5th, 

6th, and 7th such tax years by the 

aggregate gross receipts for those tax 

years, then divide the result by 2.
Form 6765 (2010) Page 4 

• For the 9th tax year beginning after 

1993 for which you have qualified 

research expenses, divide the aggregate 

qualified research expenses for the 5th, 

6th, 7th, and 8th such tax years by the 

aggregate gross receipts for those tax 

years, then divide the result by 1.5.

• For the 10th tax year beginning after 

1993 for which you have qualified 

research expenses, divide the aggregate 

qualified research expenses for the 5th 

through 9th such tax years by the 

aggregate gross receipts for those tax 

years, then divide the result by 1.2. 

• For the 11th and later tax years 

beginning after 1993 for which you have 

qualified research expenses, divide the 

aggregate qualified research expenses 

for any 5 of the 5th through 10th such tax 

years by the aggregate gross receipts for 

those tax years.

The fixed-base percentage for an 

existing company (any company that is 

not a start-up company) is figured by 

dividing the aggregate qualified research 

expenses for the tax years beginning after 

1983 and before 1989 by the aggregate 

gross receipts for those tax years.

The fixed-base percentage for all 

companies (existing and start-up) must 

be rounded to the nearest 1/100th of 1% 

(that is, four decimal places) and cannot 

exceed 16%. In addition, when figuring 

your fixed-base percentage, you must 

reflect expenses for qualified research 

conducted in Puerto Rico or a U.S. 

possession for all prior tax years included 

in the computation.

If short tax years are involved, see 

Regulations section 1.41-3(b).

▲!

CAUTION

Reduce gross receipts by 

returns and allowances. For 

a foreign corporation, 

include only gross receipts 

that are effectively connected with a trade 

or business in the United States (or in 

Puerto Rico or a U.S. possession, if 

applicable).

Line 11

Enter the average annual gross receipts 

(reduced by returns and allowances) for 

the 4 tax years preceding the tax year for 

which the credit is being determined. You 

may be required to annualize gross 

receipts for any short tax year. For a 

foreign corporation, include only gross 

receipts that are effectively connected 

with a trade or business in the United 

States (or in Puerto Rico or a U.S. 

possession, if applicable).

For a tax year that the credit 

terminates, the average annual gross 

receipts for the four tax years preceding 

the termination tax year is prorated for 

the number of days the credit applied 

during the tax year. For more information, 

see section 41(h).

Line 17

If you do not elect the reduced credit, 

which can only be claimed on an original 

timely filed return (with extensions), you 

must reduce your otherwise allowable 

deduction for qualified research expenses 

or basic research expenses by the 

amount of the credit on this line. If the 

credit exceeds the amount allowed as a 

deduction for the tax year, reduce the 

amount chargeable to capital account for 

the year for such expenses by the 

amount of the excess. Attach a schedule 

to your tax return that lists the deduction 

amounts (or capitalized expenses) that 

were reduced. Identify the lines of your 

return (schedule or forms for capitalized 

items) on which the reductions were 

made.

Section B—Alternative Simplified 

Credit

Complete this section only if, instead of 

the regular credit: 

1. You are electing the alternative 

simplified credit or

2. You previously elected the 

alternative simplified credit and are not 

revoking the election on this return.

Line 29

Enter your qualified research expenses 

for the prior three tax years. If the credit 

terminates during the tax year, prorate 

the qualified research expenses for the 

prior three tax years for the number of 

days the credit applied during the tax 

year. For more information, see section 

41(h).

Section C—Summary

Line 35

If the credit on line 17 or 34 includes 

amounts paid to employees as wages, 

and you are also claiming a credit for 

employer differential wage payments 

based on payments you made to the 

same employees, enter on line 35 the 

portion of the credit from Form 8932, line 

2, that is attributable to wages that were 

also used to figure the credit on line 17 or 

line 34 (whichever applies).

See Form 8932, Credit for Employer 

Differential Wage Payments, for more 

information on the credit.

Line 39

Estates and trusts. Allocate the credit

for increasing research activities on line 

38 between the estate or trust and the 

beneficiaries in the same proportion as 

income was allocated and enter the 

beneficiaries’ share on line 39.

Paperwork Reduction Act Notice. We 

ask for the information on this form to 

carry out the Internal Revenue laws of the 

United States. You are required to give us 

the information. We need it to ensure that 

you are complying with these laws and to

allow us to figure and collect the right

amount of tax.

You are not required to provide the 

information requested on a form that is 

subject to the Paperwork Reduction Act 

unless the form displays a valid OMB 

control number. Books or records relating 

to a form or its instructions must be 

retained as long as their contents may 

become material in the administration of 

any Internal Revenue law. Generally, tax 

returns and return information are 

confidential, as required by section 6103.

The time needed to complete and file 

this form will vary depending on individual 

circumstances. The estimated burden for 

individual taxpayers filing this form is 

approved under OMB control number 

1545-0074 and is included in the 

estimates shown in the instructions for 

their individual income tax return.

The estimated burden for all other 

taxpayers who file this form is shown 

below. The estimated average time is:

Recordkeeping . . . 10 hr., 2 min.

Learning about the law 

or the form . . . . . 2 hr., 5 min.

Preparing and sending 

the form to the IRS . . . 2 hr., 20 min.

If you have comments concerning the 

accuracy of these time estimates or 

suggestions for making this form simpler, 

we would be happy to hear from you. See 

the instructions for the tax return with 

which this form is filed.