Treasury, IRS Release Final Regulations On Advanced Manufacturing Production Credit

Key Takeaways:

• Treasury and IRS finalize Section 45X rules, allowing credits for U.S.-produced clean energy components.

• "Substantial transformation" is key to qualify as production under Section 45X, not mere assembly.

• Final rules expand credit eligibility to include some raw material extraction costs for critical minerals.

The Treasury and the IRS On October 24 issued the final rules for the advanced manufacturing production credit under Internal Revenue Code Section 45X, which offers eligible taxpayers a monetizable tax credit for the domestic production and sale of specific eligible components that support clean energy technologies.

The government had previously released proposed regulations, for which it received 193 written comments and held a public hearing on February 22, 2024. In response to stakeholder feedback, the final rules clarify several issues while largely maintaining the approach of the proposed regulations. For prior