Form 6765

Department of the Treasury 

Internal Revenue Service

Credit for Increasing Research Activities

▶ Attach to your tax return.

OMB No. 1545-0619

2009

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 (2009)
Form 6765 (2009) 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 (2009)

General Instructions

Section references are to the Internal 

Revenue Code unless otherwise 

noted.

What’s New

The alternative incremental credit 

terminated for tax years beginning 

after December 31, 2008.

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 expenditures paid or 

incurred 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 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 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.

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 (2009) 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.

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-of-effort amounts for the 

three preceding tax years. See section 

41(e) for details.

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 

start-up 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 (2009) 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).

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).

▲!

CAUTION

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 . . 16 hr., 15 min.

Learning about the law 

or the form . . . . 2 hr., 22 min.

Preparing and sending 

the form to the IRS . 2 hr., 45 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.