IRS Finalizes Rules on Advanced Manufacturing Investment Credit

IRS and Treasury issue guidance on implementation of advanced manufacturing investment credit

Oct. 22, 2024

WASHINGTON — The Department of the Treasury and the Internal Revenue Service today issued final regulations that provide guidance regarding the implementation of the Advanced Manufacturing Investment Credit, established by the CHIPS Act of 2022.

The final regulations provide the eligibility requirements for the credit and provide clarity on the amended investment credit recapture provisions.

This credit will incentivize the manufacturing of semiconductors and semiconductor manufacturing equipment within the United States. The credit is available to taxpayers that meet certain eligibility requirements, and there is the ability for taxpayers to make an elective payment election to be treated as making a refundable payment against the tax equal to the amount of the credit.

A partnership or S corporation can make an elective payment election to receive a payment, instead of claiming the credit.

The Advanced Manufacturing Investment Credit for any taxable year is generally equal to 25% of an eligible taxpayer's qualified investment in an advanced manufacturing facility. An eligible taxpayer's qualified investment equals its basis in any qualified property placed in service during the taxable year. The qualified property must be integral to the operation of the advanced manufacturing facility. The credit is generally available for qualified property placed in service after Dec. 31, 2022.