IRS Grants Extra Year for Section G Compliance—What Taxpayers Need to Know

On October 1, 2025, the IRS announced an extension for certain R&D Tax Credit reporting requirements, giving taxpayers more time to adapt to the revised Form 6765.

Originally, Section G (project-level reporting) was mandatory beginning in tax year 2025. In a surprising change, the IRS confirmed that Section G will remain optional for the 2025 tax year. Beginning in tax year 2026, Section G will become mandatory, except for:

• Taxpayers claiming the payroll tax credit, or
• Taxpayers with Qualified Research Expenses (QREs) of $1.5 million or less AND gross receipts of $50 million or less.

This extension gives companies valuable time to refine their systems and processes for tracking and reporting QREs by project.

The IRS also extended the transition period for R&D Credit refund claims until January 10, 2027. Taxpayers will still have 45 days to perfect their refund claims before the IRS issues a final determination.

While these changes provide welcome breathing room, taxpayers and advisors should not delay. Section G’s project-level reporting will soon be the standard, and proactive preparation now will ensure stronger, more defensible credit claims in 2026 and beyond.

McGuire Sponsel will continue to monitor IRS guidance closely and share updates as new developments unfold. In the meantime, taxpayers and advisors should use this extension as an opportunity to prepare for the upcoming project-level reporting requirements. If you have questions about how these changes may affect your client’s R&D Credit filings, we encourage you to reach out to our R&D Tax Credit Services team for guidance.