Bill > HR1496

This bill establishes a tax credit to incentivize domestic production of high-performance rare earth magnets, which are critical components in many advanced technologies like electric vehicles, wind turbines, and defense systems. The bill provides a tax credit of $20 per kilogram for rare earth magnets manufactured in the United States, with an increased credit of $30 per kilogram if at least 90% of the rare earth materials are produced domestically. The credit specifically applies to permanent magnets with high intrinsic coercivity (a measure of magnetic strength), primarily made from neodymium-iron-boron or samarium-cobalt alloys. To ensure national security and reduce dependence on foreign supply chains, the bill restricts credit eligibility for magnets using component materials from non-allied foreign nations, with a phased implementation allowing some flexibility for materials like dysprosium and terbium until January 1, 2027. The tax credit will gradually phase out after December 31, 2034, reducing to 70% in 2035, 35% in 2036-2037, and becoming zero after 2037. The bill also includes provisions for manufacturers contracted by the Department of Energy or Defense to potentially qualify for the credit even if their magnets do not meet the standard coercivity requirements, promoting technological innovation and domestic manufacturing capabilities.

Budget and Finance

https://www.congress.gov/bill/119th-congress/house-bill/1496/all-info