Summary

Creates a new production tax credit for making rare earth permanent magnets in the United States. Companies that manufacture and sell qualifying magnets made in the U.S. can claim $20 per kilogram, or $30 per kilogram if at least 90% of the magnet’s rare earth content (by weight) comes from U.S.-produced materials. The credit includes rules for where materials come from and where magnets are made, limited exceptions for certain materials through 2026, and a phasedown that starts after 2034. It applies to tax years beginning after December 31, 2024.

Key Points

• Creates a per‑kilogram tax credit for U.S. production of rare earth permanent magnets.
• Pays $20/kg, or $30/kg if at least 90% of rare earth content is U.S.-produced by weight.
• Covers magnets that are both manufactured and sold by the taxpayer.
• Includes sourcing and manufacturing rules to verify domestic production and content.
• Allows limited exceptions for certain input materials through 2026.
• Begins a phasedown of the credit after 2034.
• Effective for tax years starting after December 31, 2024 (starting in 2025).
• Designed to boost U.S. magnet manufacturing and domestic supply chains.

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