Section E—Other Information

Complete this section to provide additional details or information about the total QREs reported in Section F. If you are a member of a controlled group, complete this section for only the filing member’s QREs.

Line 37 Enter the total number of business components generating the QREs shown on line 48, not just the limited number of business components you may be reporting in Section G.

The four-part test must be applied separately to each business component. See section 41(d)(2)(A) for an explanation of the business components test.

Line 38 Enter the total amount of all officer wages included in the amounts shown on line 42, if the amount shown on line 42 as wages for qualified services includes wage amounts attributable to any officer of the reporting entity. The corporation determines who is an officer under the laws of the state where it is incorporated. When corporate officers perform services for the corporation and receive or are entitled to receive payments, their compensation is generally considered wages. The fact that an officer is also a shareholder does not change this reporting requirement.

Line 39 Check “Yes,” if any QREs reported on line 48 are related to an acquisition or disposition made during the current tax year. See Special Rules , earlier, regarding consistency requirements. Otherwise, check “No.”

Line 40 Check “Yes,” if you identified any new categories of expenses included in line 48. Otherwise, check “No.” If you include any new categories or recharacterized any categories of expenses in the current year compared to the base year(s), those expenses must be included and adjusted in any of the base years when computing the credit. See Special Rules , earlier, regarding consistency requirements.

Line 41 Check “Yes” if any of the QREs on line 48 are following the ASC 730 Directive. The ASC 730 Directive only applies to the following taxpayers.

1. Assets equal to or greater than $10 million, and
2. Follows U.S. GAAP to prepare their Certified Audited Financial Statements (CAFS), showing the amount of current Research and Development expenses either as:

a. A separate line item on the income statement included in their CAFS, or

b. Separately stated in a note to their CAFS.

In addition, the ASC 730 Directive does not apply to any taxpayer unless the taxpayer uses these same U.S. GAAP financial statements to reconcile book income to federal tax income on Schedule M-3. If you check “Yes,” enter the amount from ASC 730 Directive , Appendix C, line 19, on line 41, then see ASC 730 Directive Single Entry for Section G, later, for the single ASC 730 entry you will report for the line 41 amount. Any other amounts on the ASC 730 Directive Appendix B, column B or C, are excluded from the special instructions for the single ASC 730 entry in Section G. You may attach ASC 730 Directive Appendices A, B, C, and D to your return using the following file naming conventions.

• “Form6765ASC730AppendixA.pdf”

• “Form6765ASC730AppendixB.pdf”

• “Form6765ASC730AppendixC.pdf”

• “Form6765ASC730AppendixD.pdf”

See the ASC 730 LB&I Directive & FAQs for more information and the associated appendices mentioned above.