Major IRS Changes to Form 6765: What Every R&D Claimant Must Know in 2025

The IRS just rolled out the biggest update to the R&D Tax Credit Form in over a decade and it's going to affect every company claiming the R&D tax credit incentives in the U.S. If you're building new technologies, improving processes, or developing custom solutions, these changes will impact your substantiation requirements, documentation strategy, and compliance exposure. 

Let's break down what's changing, why it matters, and how Boast helps you confidently navigate the new landscape. 

What's Changing: IRS Form 6765 Overhaul 

Form 6765 is the document companies use to claim the federal Research & Development (R&D) Tax Credit within the corporate tax return. As of tax years beginning January 1, 2025, a significantly revised version of this form introduces:

Three New Reporting Sections: E, F, and G 

• Section E – Other Information:
  Includes the number of business components, officer wages, changes from acquisitions/dispositions, and whether ASC 730 financial accounting methods were used. 
• Section F – QRE Summary by Category:
  Determining whether you are required to complete section G and a break down of total Qualified Research Expenses (QREs) into wages, supplies, contract research, and cloud computing expenses for all business components. 
• Section G – Business Component Reporting:
  Requires line-by-line detail for up to 50 business components or those that represent 80%+ of your QREs. Each entry must specify: 
  • The type of component (product, process, software, etc.); 
  • Wage QREs broken out by direct research, supervision or support of qualified activity; 
  • Information sought to be discovered for each business component to ensure it meets the IRS's four-part test 

Note: Section G is optional for tax year 2024, but mandatory starting in 2025 for certain taxpayers. 

Why It Matters: Increased Scrutiny, Deeper Documentation 

These changes aren't just procedural; they signal a major shift toward real-time, audit-ready substantiation. The IRS is focused on rooting out incomplete or inflated claims by demanding: 

• Project-level detail on R&D initiatives 
• Contemporaneous documentation (not recreated after the fact) 
• Clear allocation of wages to research, supervision, or support activities 
• Categorization and traceability of contractor, cloud, and supply costs 

Failing to comply could delay your claim or trigger an audit. Especially at risk are: 

• Companies inaccurately qualifying business components with no technological uncertainty  
• Firms claiming substantial officer wages without documentation of technical involvement 
• Businesses misclassifying expenses tied to R&D initiatives 
• Taxpayers applying significant deviations in methodology or allocation approach  

Who This Impacts: Beyond Tech Startups 

The new Form 6765 applies across all industries. If your company is improving or building something new and solves technical challenges regardless of sector, you will be impacted by this change . 

Industries who benefit from the R&D Tax credit and will be impacted by the new form change: 

• Orphan Drug Developers & Life Sciences Firms
  Especially in Pennsylvania and other hubs, these companies often pursue highly experimental projects with long timelines and high regulatory burden making them strong R&D credit candidates. 
• Manufacturers
  Custom fabrication, enhancing automated processes, and new prototype development qualify and will require for these companies to accurately allocate all time and material costs towards R&D 
• Engineering & Construction Firms
  Companies developing new product designs or technical solutions, or evaluating different construction techniques, qualifying towards the credit, will have to be provide association on all eligible personnel conducting iterative work.  
• AgriTech, Food & Beverage
  Reformulating products, testing shelf life, or designing new technology to accurately monitor crop conditions, are R&D activities that will require a taxpayer to accurately maintain precise records of physical materials used, and third-party support for laboratory analysis. 

How Boast Helps: Turn Compliance Into a Strategic Asset 

Boast has proactively prepared for this highly anticipated change and is ready to provide adequate support for this change. With Form 6765 now demanding audit-level substantiation, our platform and expert team help you stay ahead—without the stress or spreadsheet overload. 

With Boast, you get: 

• System Integrations with project tracking, payroll, and accounting tools 
• Project-Level Mapping that aligns your initiatives with QRE categories and IRS requirements with Jira and Github systems 
• Automated Documentation Collection no more chasing down timesheets or activity logs 
• Real-Time Collaboration Tools to gather insights from engineering, finance, and leadership 

 Our claims are grounded in verifiable data — aligning precisely with the level of substantiation the IRS now requires. 

Final Thoughts: Prepare Now or Risk Leaving Credits Behind 

IRS Form 6765 has evolved from a simple form to a comprehensive, audit-ready submission. 

Companies that wait to update their documentation processes could: 

• Lose out on eligible credits 

• Face increased audit scrutiny 

• Delay filings or refund processing 

But with the right partner, these changes are an opportunity to future-proof your innovation financing strategy. 

Let’s review your current documentation process and get you ready for the 2025 compliance landscape.