On Dec. 15, US IRS issued guidance for energy, minerals tax credit.
US IRS, US Treasury issued guidance for advanced manufacturing production credit.
Impacts producers and sellers of certain minerals including inputs to semiconductors.
Thus, rules may impact firms of all sizes providing inputs to Chinese manufacturers.
Established by clean energy initiatives within Inflation reduction act, see #188967.
Executive Summary
Created section 45X to provide credit for US production, sale of eligible components.
E.g. Solar, wind energy, battery components, inverters, applicable critical minerals.
Fifty minerals including aluminum, chromium, cobalt, graphite, gallium and germanium (both used in semiconductor technology), tin, titanium, see #178840 and #145770.
Provides rules to calculate tax credit, rules to qualify production or sale, and reporting.
Rules re sales to unrelated persons and elections for sales to related persons that are partnerships, trusts, estates, sole proprietorships, corporations by a controlled group.
Amortizations of credit amount for sales after Dec. 31, 2029 and after Dec. 31, 2032.
Rules may be applicable to small firms based on small business definition set by SBA.
Consultation
Public hearing on Feb. 22, 2024; written or electronic comments by Feb. 13, 2024.
Oct. 2024 US IRS Final Regulations
On Oct. 28, 2024, US IRS, Treasury issued final regulations on guidance for advanced manufacturing production credit; final regulations are effective on Dec. 27, 2024.
Define qualifying production activities, provide rules for sale of eligible components to unrelated persons, as well as rules to address contract manufacturing scenarios.
Provide definitions of eligible components, rules related to calculating the credit, including eligible production costs, specific recordkeeping and reporting requirements.
Nov. 2024 US IRS Final Rule Correction
On Nov. 26, 2024, US IRS published corrections to Oct. 28 final rule on advanced manufacturing production credit, to make clarifications and corrections to citations.
The corrections as well as the final regulations become effective on Dec. 27, 2024.
