Treasury Department Issues Final Section 48D Guidance On CHIPS Act Semiconductor Tax Incentive

Highlights

• The Chips and Science Act of 2022 (CHIPS Act) added Section 48D to the Internal Revenue Code to incentivize the manufacture of semiconductors and semiconductor manufacturing equipment.
• The Section 48D credit is generally 25 percent of the basis of any qualified property that is part of an eligible taxpayer's advanced manufacturing facility.
• The U.S. Department of the Treasury and IRS recently released final regulations under Section 48D, which provide helpful clarifications.
• The recent finalization of these regulations (Sections 1.48D-1 through 1.48D-5 and Section 1.50-2) follow the finalization of Section 1.48D-6, related to the direct payment of this tax credit and finalized earlier this year, completing the guidance process to implement Section 48D.