The Advanced Manufacturing Production Credit was established by the Inflation Reduction Act of 2022.
The tax credit is equal to a specific credit rate based on the Eligible Component(s) produced by a manufacturer in their trade or business and sold within the taxable year for which the credit is claimed. The sale of the Eligible Component(s) is required to be to an unrelated person, unless the Eligible Component is integrated into another Eligible Component that is sold to an unrelated person or the Related Party Election is elected.
Who can claim the credit
Manufacturers of Eligible Components that meet certain eligibility requirements.
For a manufacturer to be eligible to claim the credit, it must:
- Produce Eligible Components in the United States or its Possessions, as part of a trade or business.
- Comply with one of the following sale scenarios:
- Sell Eligible Components to an Unrelated Party, or
- Sell to a Related Party who subsequently sells Eligible Components to a Unrelated Party, or
- Sell to a Related Party and make an election to treat a Related Party as Unrelated.
- Substantially transform Eligible Components during manufacturing
- Note: A facility that has claimed the 48C Advanced Energy Project credit is ineligible for the 45X Advanced Manufacturing Production Credit
Eligible Components
Eligible Components include several categories with specific sub-components identified:
- Solar Energy Components
- Wind Energy Components, including Offshore Wind Vessels
- Inverters
- Electrode Active Materials
- Qualifying Battery Components
- Applicable Critical Minerals
How to claim the credit
Use Form 7207, Advanced Manufacturing Production Credit to calculate and report your credit for any qualified Eligible Component sold to an unrelated party during the taxable year.
Taxpayers can elect to treat the Advanced Manufacturing Production Credit as a payment against tax that is equal to the amount of the credit. For property held directly by a partnership and S corporation, the partnership or S corporation may elect to receive a payment equal to the amount of the credit instead of claiming the credit. Taxpayers may also elect to transfer any credit earned through the Advanced Manufacturing Production Credit. To do either, the taxpayer or entity must:
- Obtain as registration number using the IRA/CHIPS Pre-filing Registration Tool for each qualified investment.
- File the annual tax return by the due date (or extended due date) and make a valid elective payment election. This includes a properly completed and attached Form 7207, Advanced Manufacturing Production Credit, and Form 3800, General Business Credit, which should include the registration number(s) and required return attachments.
You can choose to receive an elective payment which will be treated as a payment against the tax liability that is equal to the amount of the credit.
News releases
IR-2023-249, IRS opens free IRA and CHIPS Pre-filing Registration Tool for organizations to register to monetize clean energy credits, Dec. 22, 2023
IR-2023-238, Treasury, IRS issue guidance for the advanced manufacturing production credit, Dec. 14, 2023
IR-2024-281, Treasury, IRS issue final regulations for the Advanced Manufacturing Production Credit, Oct. 24, 2024
Law and guidance
Final regulations
Advanced Manufacturing Production Credit, Correction
Advanced Manufacturing Production Credit
Proposed regulations
Proposed Regulations: Section 45X Advanced Manufacturing Production Credit (December 15, 2023)
Forms and publications
About Form 7207, Advanced Manufacturing Production Credit
Related
Elective pay and transferability
Elective pay and transferability frequently asked questions: Elective pay