Instructions for Form 6765›(Rev. December 2025)›Specific Instructions
Section D—Qualified Small Business Payroll Tax Election and Payroll Tax Credit
Instruction 6765 — Instructions for Form 6765, Credit for Increasing Research Activities · 2026-10-03 edition · updated 2026-10-04 · United States
Complete this section only if you are making the payroll tax election. Before completing this section, you must complete Form 3800 if you are a qualified small business other than a partnership or an S corporation.
Line 33a Check the box on line 33a if you are a qualified small business electing to claim a certain portion of your research credit as a payroll tax credit. See Qualified Small Business (Payroll Tax Credit Election), earlier.
Line 33b Check the box if payroll tax is reported for a different EIN.
Line 34 Enter the portion of your research credit, figured on line 28, that you are claiming as a payroll tax credit. Don’t enter more than $500,000.
Line 35 Use the worksheet to figure the general business credit carryforward for the current year.
Line 36 Enter the amount from line 36 on the applicable line of Form 8974, Part 1, column (e). Use Form 8974 to figure the amount to be applied to your payroll taxes.
A qualified small business claiming a portion of the research credit as a payroll tax credit must adjust the research credit carryforward for the payroll tax credit claimed.
Partnerships and S corporations report the above credits on line 29. Also, estates and trusts that can allocate the source credit to beneficiaries report the above credits on line 29. All other filers figuring a separate credit on earlier lines also report the above credits on line 29. All others not using earlier lines to figure a separate credit can report the above credits directly on Form 3800, Part III, as follows.
- Eligible small businesses, report the credit on line 4i. See the definition of Eligible Small Business (For Purposes of Offsetting AMT Only) , earlier. Also, see Treatment of partners and S corporation shareholders , earlier.
• All others, report the credit on line 1c.
Line 29 Enter the total credit for increasing research activities from:
Schedule K-1 (Form 1065), Partner’s Share of Income, Deductions, Credits, etc., box 15 (code M);
Schedule K-1 (Form 1120-S), Shareholder’s Share of Income, Deductions, Credits, etc., box 13 (code M); and
Instructions for Form 6765 (December 2025) 7
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