Form 6765

Department of the Treasury 

Internal Revenue Service

Credit for Increasing Research Activities

▶ Attach to your tax return.

OMB No. 1545-0619

2011

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 (2011)
Form 6765 (2011) 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

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 . . . . . . 34 

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, stop here 

and report this amount on Schedule K. All others, stop here and 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 amount on line 1c of Form 3800 . . 40

General Instructions

Section references are to the Internal 

Revenue Code unless otherwise noted.

What's New

• The IRS has created a page on IRS.gov 

for information about Form 6765 and its 

instructions at www.irs.gov/form6765. 

Information about any future developments 

affecting Form 6765 (such as legislation 

enacted after we release it) will be posted 

on that page.

• The credit for increasing research 

activities is scheduled to expire for 

research expenses paid or incurred after 

2011. Do not include research expenses 

paid or incurred after 2011 on this form 

unless these credits are extended. If they 

are extended, the change will be 

highlighted under Highlights of Recent Tax 

Changes at www.irs.gov/formspubs and at 

www.irs.gov/form6765.

• If you are claiming the reduced credit 

under section 280C, you must use Form 

6765 to clearly indicate an intent to make 

the election. 

Purpose of Form

Use Form 6765 to figure and claim the 

credit for increasing research activities or 

to elect the reduced credit under section 

280C.

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/

ndex.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 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 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 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 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 from that of the designated 

member, then that member should file an 

amended return to conform to the 

designated member's method.

Form 6765 (2011)
Form 6765 (2011) Page 3 

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 1.41-9.

For purposes of the reduced credit 

election, a member of a controlled group of 

corporations (within the meaning of section 

41(f)(5)), or a trade or business which is 

treated as being under common control 

with other trades or businesses (within the 

meaning of section 41(f)(1)(B)), may make 

the election under section 280C(c)(3). 

However, only the common parent (within 

the meaning of section 1.1502-77(a)(1)(i)) of 

a consolidated group may make the 

election on behalf of the members of a 

consolidated group. 

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 1.41-9. 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.

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.

Line 1

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.

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 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.

• 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 fixedbase 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).
Form 6765 (2011) Page 4 

▲!

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 are electing the reduced research 

credit, you must complete Form 6765 (even 

if no research credits are claimed on the 

original return) and clearly indicate your 

intent to make the election. In order for the 

election to apply, the Form 6765 must be 

filed with your original timely filed (including 

extensions) return for the tax year. Once 

made, the election is irrevocable for that 

tax year.

If you do not elect the reduced credit, 

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.

If the estate or trust is subject to the 

passive activity rules, include on line 37 

any credit for increasing research from 

passive activities disallowed for prior years 

and carried forward to this year. Complete 

Form 8582-CR, Passive Activity Credit 

Limitations, to determine the allowed credit 

that must be allocated between the estate 

or trust and the beneficiaries. For details, 

see the instructions for Form 8582-CR.

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. 

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.