How Neo.Tax Tackles the New Form 6765 Section G Reporting Requirements

Starting in 2025, companies will face a significant new challenge with the updated Form 6765: Section G. This new section demands an unprecedented granularity in reporting, down to each specific business component. It will substantially increase the time and financial resources required to claim the credit. 

At Neo.Tax, we understand this looming burden.  That’s why we've automated the compliance with Section G for you.

The Challenge: Deconstructing the New Form 6765 Section G

Navigating the detailed demands of the new Form 6765 Section G for Tax Year 2025 will be a considerable undertaking for taxpayers.

Companies will now need to:

• Identify every "Business Component" of their R&D activities, defining its type and purpose
• Allocate all Qualified Research Expenses (QREs) by Business Component – including wages, contract research, supplies, and cloud computing costs.
• Further break down wage expenses into supervisor and support categories within each business component. 

This level of granular reporting, if done manually, will be a time-consuming and error-prone process, leading to increased compliance costs and audit risks.

Neo.Tax: The Intelligent Solution to Form 6765 Section G 

Neo.Tax is purpose-built to alleviate the pressures of R&D Credit filing and ASC 350-40 capitalization. So, we went about creating an intelligent solution for the new Form 6765 Section G. 

Our AI system now:

1. Automatically identifies business components including identifying its type and purpose.
2. Allocates costs by business component — including wages, contract research, supplies, and cloud computing, directly from your underlying data. 
3. Creates detailed narratives for each business component, ensuring complete, audit-ready substantiation without any additional burden on your team.

This means no more manual categorization or complex spreadsheets. By simply connecting your project management and cost accounting data to Neo.Tax, the system will automatically break down wage expenses by supervisor and support staff within each component. 

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Business components are automatically identified.

Business component details including purpose and type are automatically flagged.

Employee wage expense are automatically allocated to business components.

Benefits of Using Neo.Tax for Form 6765 Section G Compliance

By leveraging Neo.Tax for your Form 6765 Section G compliance, businesses avoid the looming burden that others will face.  To manually locate the information, aggregate the data, and create reports on each business component would drastically increase  the cost in time and resources for your tax team and your engineers. Automating the process with Neo.Tax   both lowers compliance costs and minimizes the risk of errors, ensuring accurate and audit-ready submissions. 

The new Form 6765 is an example of the way a minor edit to tax law can have a massive effect on innovative companies. Our goal at Neo.Tax is to always do the legwork to make sure these changes are as seamless as possible for our customers.

With Neo.Tax, you can confidently navigate the new requirements without needing to overhaul your R&D team’s processes. We automated these complex tasks, in order to free up your valuable resources, allowing your team to focus on core business activities and continued innovation, rather than getting bogged down in administrative tax compliance. 

At Neo.Tax, we want to make tax a strategic advantage without making it your full-time job. 

To see how Neo.Tax can simplify your Form 6765 Section G reporting and help your business thrive, we invite you to learn more and request a personalized demo today.