Item A—Section 280C Election

You must check “Yes” to elect or “No” to not elect the section 280C reduced credit on your original timely filed return, including extensions.

If you are electing the reduced research credit, you must complete Form 6765 (even if no research credits are claimed on the original return). In order for the election to apply, the Form 6765 must be filed with your original timely filed return (including extensions) for the tax year. This election cannot be made or changed on an amended return. Once made, the election is irrevocable for that tax year.

Tip: By checking “Yes” to elect the reduced research credit when no research credits are claimed on the original return doesn’t mean that you are claiming either the regular method or making the ASC election.

If you don’t elect the reduced credit, you must reduce your domestic research or experimental expenditures under section 174A otherwise taken into account as a deduction or charged to a capital account by the amount of the research credit. With respect to taxable years beginning before January 1, 2025, if the credit exceeds the amount allowed as a deduction for the tax year for qualified research expenses or basic research expenses, reduce the amount chargeable to the capital account for the year for such expenses by the amount of such excess. Attach a statement 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. If you e-file, name the attachment “Form6765ItemASection280C.pdf.”

If you make an election to claim a portion of your research credit as a payroll tax credit, the amount elected is treated as a research credit for purposes of the reduced credit.