New Controlled Group Rules for Form 6765

Form 6765 Controlled Group Members Beware!

Watch Jason’s Update

A small software error could erase your R&D credit this year. In this short video, MASSIE President & Founder Jason Massie explains what Controlled Group filers need to know before submitting Form 6765 for 2024.

Watch the video now to see how this issue happens—and what to check before you file.

Form 6765 Controlled Group Filers: Check Your Software

Many companies rely on software to calculate research credits across multiple entities. However, the 2024 Form 6765 introduces a layout change that could cause errors for Controlled Group members filing separate returns.

If your software applies the wrong inputs, it might show a zero credit even when your calculations are correct.

Why This Matters

Controlled Group filers calculate their base period using combined prior-year QREs. That total determines the group’s credit before it’s split among members.

If software mistakenly compares the group’s base period to an individual member’s QREs, the form can misreport the credit entirely.

Example of the Error

In Jason’s example, the group’s average base period equals $8.7 million. The combined QREs reach $19 million, generating a $1.4 million credit. One member’s share is 5%, which equals $72,000.

But when software uses the full group’s $52 million base instead of the member’s $954,000 QREs, the system shows a zero-credit result. That’s a costly mistake—especially if you don’t catch it before filing.

How to Prevent It

Before submitting your return:

Confirm your software applies the combined base period correctly.
Double-check that each member’s credit matches your internal calculation.
Ensure the Form 6765 attachment and final form reflect the same credit total.

Even a small mismatch between the worksheet and the final form can erase your credit completely.

Final Advice

Jason recommends reviewing your Form 6765 calculations manually before filing. The 2024 layout may be unclear—or even contain a typo—but your group’s credit should still reflect your verified math.

If something looks off, reach out to us. We’re here to help.