How to generate Form 6765 partnership Increasing Research Credit in Lacerte

This article will assist you with generating Form 6765, Credit for Increasing Research Activities, in the Partnership and Individual modules of Lacerte. Use the applicable instructions below for your module.

What's new for Form 6765 for tax year 2024:

• If you have reported Qualified Research Expenses (QREs) on line 48, you must complete Section E.
• If you are eligible and choose to follow the new ASC 730 directive, check “Yes” on line 41.
• New Section F—Qualified Research Expenses Summary. In this section, indicate if you are required to complete Section G and enter your total QREs on each applicable line.
• New Section G—Business Component Information. For tax years beginning after 2024, Section G will be required, subject to the guideline. For tax years beginning before 2025, Section G will be optional for all filers.

Table of contents:

To enter amounts for the Form 6765 in the Partnership module:

1. Go to Screen 20, Schedule K Credits.
2. Select Other Credits from the top left panel.
3. From the Sections list select Increasing Research Credit (6765).
4. Select the box Electing alternative simplified credit, if applicable.
5. Select the box Elect reduced credit (Section 280c), if applicable.
   • If this box is selected, Lacerte will mark Yes on Line 17. 
   • Lacerte will multiply the amount on Line 16 by 13% and the amount on Line 40 by 65%.
6. Enter the applicable expenses in the remaining fields to flow to Form 6765.

The credit will flow to the Schedule K(1065), Line 15f, Other Credits, and to the Schedule K-1, Box 15 with a code L.

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If entering this information into the 1065 from a passthrough K-1:

1. Go to Screen 23, Passthrough K-1's.
2. Scroll to the Credits (15) section, enter the amount in Credit for increasing research (M)

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To enter amounts for the Form 6765 in the S Corporation module:

1. Go to Screen 26.2, Credits (Schedule K).
2. Select Schedule K Credits from the top left panel.
3. From the Sections list select Increasing Research Credit (6765).
4. Select the box Electing alternative simplified credit, if applicable.
5. Select the box Elect reduced credit (Section 280c), if applicable.
   • If this box is selected, Lacerte will mark Yes on Line 17. 
   • Lacerte will multiply the amount on Line 16 by 13% and the amount on Line 40 by 65%.
6. Enter the applicable expenses in the remaining fields to flow to Form 6765.

The credit will flow to the Schedule K(1120S), Line 13g, Other Credits, and to the Schedule K-1, Box 13 with a code M.

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To enter Form 6765 in a Corporate return:

1. Go to Screen 28, General Bus. & Vehicle Credits.
2. From the Sections list, select Increasing Research Credit (6765).
3. Check the box labeled Electing alternative simplified credit, if applicable
4. Check the box labeled Electing reduced credit (Section 280C), if applicable
   • This will mark the boxes on lines 17 and 34 "Yes"
   • The amount on line 16 will be multiplied by 15.8% and the amount on line 33 will be multiplied by 79%
5. Make any other applicable entries in this section for expenses that should flow to the 6765

The amount of credit will be calculated on the 6765 and flow from there to the 3800 and then to the 1120, page 3, Schedule J, part I, line 5c.

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To enter Form 6765 in the Individual module:

1. Go to Screen 34, General Bus. & Vehicle Credits.
2. From the Sections list, select Increasing Resrch. Act. Cr. (6765).
3. Select any of the applicable checkboxes:
   • Electing alternative simplified credit
   • Elect reduced credit (Section 280C)
   • Eligible small business for Form 6765 ONLY
4. Enter the Payments to energy consortia.

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If entering this information from a partnership K-1:

1. Go to Screen 20, Passthrough K-1's.
2. Select Partnership Information from the left navigation menu.
3. Select the applicable Partnership from the left navigation menu.
4. Scroll down to Line 15 - Credits and Withholding.
5. Locate the (15M) Increasing Research Credit subsection.
6. Enter the Amount of credit.
7. Enter any other applicable fields.

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If entering this information from an S corporation K-1:

1. Go to Screen 20, Passthrough K-1's.
2. Select S Corporation Information from the left navigation menu.
3. Select the applicable S Corporation from the left navigation menu.
4. Scroll down to Line 13 - Credits and Withholding.
5. Locate the (13M) Increasing Research Credit subsection.
6. Enter the Amount of credit.
7. Enter any other applicable fields.

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Entering Increasing Research Activities Credit carryover for an individual return

Solution #1:  To enter prior year 'Increasing Research Activities Credit' carryover amounts for 'General Business Carryforwards' (Form 3800, page 3, Part III, check box C):

1. Go to Screen 34, General Business and Vehicle Credits.
2. Click on Carryovers/Misc. Info in the upper left corner of the navigation panel.
3. Scroll down to the Business Credit Carryforwards and Carrybacks (3800) section.
4. In the Credit Type (Ctrl+T) field, click on the + sign next to Form 3800, Part III, Line 1 Credits.
5. Select Increasing research activities (6765).
6. Enter the amount under the General Business Carryforwards column.

Solution #2: To enter prior year 'Increasing Research Activities Credit' carryover for 'General Business Credit From a Non-Passive Activity' (Form 3800 page 3, Part III check box A):

1. Go to Screen 34, General Business and Vehicle Credits.
2. Go to the Credits section.
3. Select the Form from the drop down menu.
4. Select the Activity name or number from the drop down menu.
5. Scroll down to the Prior Year Unallowed Credits section.
6. Enter the amount in the field labeled Carryover in the Increasing Research Activities subsection.

Solution #3: To enter prior year 'Increasing Research Activities Credit' carryover for 'General Business Credit From a Passive Activity' (Form 3800 page 3, Part III check box B):

1. Go to Screen 34, General Business and Vehicle Credits.
2. Go to the Credits section.
3. Select the Form from the drop down menu.
4. Select the Activity name or number from the drop down menu.
5. Scroll down to the Prior Year Unallowed Credits section.
6. In the Other Passive Credit Carryovers subsection, select Increasing Research Activities (6765) from the Credit Type (Ctrl+T) dropdown.
7. Enter the amount in General Business Credit.

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