Tax Law and News Guidance for Adv. Manufacturing Investment Credit Read the Article Open Share Drawer Share this:Click to share on Twitter (Opens in new window)Click to share on Facebook (Opens in new window)Click to share on LinkedIn (Opens in new window) Written by Scott Cytron Published Mar 7, 2024 1 min read The IRS recently issued final regulations that provide guidance for the entities choosing the elective payment for the Advanced Manufacturing Investment Credit, established by the Creating Helpful Incentives to Produce Semiconductors Act of 2022, commonly known as the CHIPS Act. This credit will incentivize the manufacture of semiconductors and semiconductor manufacturing equipment within the United States. The credit is available to taxpayers that meet certain eligibility requirements, and taxpayers can choose to receive the credit as an elective payment. The proposed regulations describe how an entity can choose to make an elective payment election, which will be treated as a payment against the tax liability that is equal to the amount of the credit. A partnership or S corporation can make an elective payment election to receive a payment instead of claiming the credit. The advanced manufacturing investment credit for any taxable year is generally equal to 25% of an eligible taxpayer’s qualified investment in an advanced manufacturing facility. An eligible taxpayer’s qualified investment equals its basis in any qualified property placed in service during the taxable year. The qualified property must be integral to the operation of the advanced manufacturing facility. The credit is generally available for qualified property placed in service after Dec. 31, 2022. The proposed regulations include special rules applicable to partnerships and S corporations, repayment of excessive payments, and basis reduction and recapture. In addition, the proposed regulations provide rules related to an IRS pre-filing registration process that would be required. The U.S. Department of the Treasury and the IRS welcome public comments on these proposed regulations. For details on submitting comments, see the proposed regulations. Editor’s note: This article was originally published July 3, 2023, and updated with new content March 7, 2024. Previous Post Tax breaks for victims of natural disasters Next Post April 2024 tax and compliance deadlines Written by Scott Cytron Scott H. Cytron, ABC, is editor of the Intuit® Tax Pro Center. He brings more than 35 years' experience in accounting and financial services to the profession. An accredited consultant, Scott works with companies, organizations and individuals in professional services (medical, legal, accounting, engineering), high-tech and B2B/B2C product/service sales. Follow Scott on Twitter @scytron. More from Scott Cytron Comments are closed. Browse Related Articles Tax Law and News Guidance for solar/wind-powered energy Tax Law and News Energy projects for low-income communities Tax Law and News Guidance on credit for sequestration of carbon oxide Tax Law and News IRS provides guidance for employers claiming the Employ… Tax Law and News IRS provides guidance for employers claiming the Employ… Tax Law and News Guidance Issued on Deductions for Cooperatives and Thei… Tax Law and News Tax concerns: clean energy and climate action Tax Law and News IRS Issues Final Sec. 199A Regulations Tax Law and News IRS guidance for domestic content bonus credit Tax Law and News Tax Tips for Manufacturing Clients