Section 45X Advanced Manufacturing Production Credit Proposed Regs Released

The Department of the Treasury and the Internal Revenue Service (IRS) have issued proposed regulations to implement the new Section 45X advanced manufacturing production tax credit, a credit for renewable energy components produced in the United States and sold between December 31, 2022, and December 31, 2032.

The Section 45X credit applies to certain eligible components, including solar and wind energy components, inverters, qualifying battery components, and applicable critical minerals. The amount of the credit varies depending on the component manufactured.

The proposed regulations address the production of eligible components, sales to unrelated persons, special rules for sales between related persons, and rules for the so-called “Related Person Election” to treat sales to related persons as made to unrelated persons.

The proposed regulations also provide definitions of eligible components, rules for calculating the credit, and provide specific recordkeeping and reporting requirements.

The Inflation Reduction Act (IRA) added the manufacturing production tax credit as an incentive to build clean energy supply chains domestically.

Stay tuned to Weaver for further updates regarding these proposed regulations and other Inflation Reduction Act energy credits. Contact us for information and visit Weaver’s Inflation Reduction Act resources page.

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Leanne Sobel

Leanne Sobel

Director, Motor Fuels and Excise Tax Services

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Leanne Sobel, J.D., has over 15 years of experience in legal tax matters. Her career focus includes federal and state tax and…

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