Rare Earth Magnet Security Act of 2025

This bill creates a new tax credit to boost U.S. production of high‑performance rare earth magnets. Companies that make these magnets in the United States and sell them can get $20 per kilogram, or $30 per kilogram if at least 90% of the magnet’s materials come from the U.S. The credit starts to wind down in 2035 and ends after 2037 .

To qualify, magnets generally cannot use materials from a “non‑allied” foreign nation. There’s a temporary delay of this rule until January 1, 2027 for certain materials (dysprosium, terbium, samarium, gadolinium), and a narrow exception if the material was seized during wartime by Ukraine or an allied country. Companies must be in the business of making magnets. Some grant‑funded makers can qualify even if a technical standard isn’t met. There’s also an option to receive the credit as a direct payment from the IRS instead of using it only to cut taxes . The covered materials include elements like neodymium, praseodymium, dysprosium, terbium, samarium, gadolinium, and cobalt .

Key points

• Who is affected: Businesses that manufacture and sell rare earth magnets in the U.S.
• What changes: Tax credit of $20/kg, or $30/kg if 90% of materials are U.S.-produced; limits on using materials from non‑allied nations; direct‑pay option; special rules for some grant‑funded manufacturers
• When: Sourcing limits apply now, with a delay for certain materials until Jan 1, 2027; credit phases down in 2035–2037 and ends afterward