Advanced Manufacturing Investment Credit

The Advanced Manufacturing Investment Credit was established by the Creating Helpful Incentives to Produce Semiconductors Act of 2022, commonly known as the CHIPS Act.

The tax credit is equal to 25% of the qualified investment for the taxable year with respect to an advanced manufacturing facility of an eligible taxpayer. An advanced manufacturing facility is a facility whose primary purpose is the manufacturing of semiconductors or semiconductor manufacturing equipment. Qualified investment means the basis of any qualified property placed in service by the taxpayer that is part of an advanced manufacturing facility.

Who can claim the credit

Manufacturers of semiconductors and semiconductor manufacturing equipment within the United States that meet certain eligibility requirements.

Qualified property

Qualified property is:

Placed in service after Dec. 31, 2022
Tangible property that is subject to depreciation or amortization
Integral to the operation of an advanced manufacturing facility
Built or acquired by the taxpayer if the original use of the property begins with the taxpayer

Qualified property doesn't include a building or a portion of a building used for offices, administrative services, or other functions unrelated to manufacturing.

How to claim the credit

Use Form 3468, Investment Credit to calculate and report your credit for any qualified investment placed in service during the taxable year.

Taxpayers can elect to treat the advanced manufacturing investment 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. To do so, 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 3468, Investment Credit, and Form 3800, General Business Credit, which should include the registration number(s) and required return attachments.