The Department of the Treasury and Internal Revenue Service have published final rules for the Advanced Manufacturing Investment Credit, or CHIPS ITC, a part of the CHIPS and Science Act.
The Treasury Department said Tuesday that the final rules for CHIPS ITC include some changes to the proposed rules and provide more clarity on certain definitions.
CHIPS ITC offers businesses a tax credit equivalent to 25 percent of the basis of property qualified as an advanced semiconductor manufacturing facility. To qualify, the property must have been placed in service after Dec. 31, 2022 and construction must have begun after Aug. 9, 2022, the date of the CHIPS and Science Act enactment.
In addition, the guidance specifies that semiconductor wafer production also covers wafers used for photovoltaic solar energy generation
In total, the Commerce Department has provided $39 billion in CHIPS for America funding to strengthen domestic semiconductor supply chains, boost the employment rate and spur innovation. The IRS, Treasury and Energy Departments and other federal agencies will assess potential options to incentivize domestic production of the full solar supply chain.
“Semiconductors are vital to ensuring a stable supply of low-cost consumer goods and our investments continue to strengthen those supply chains, create good-paying jobs, and safeguard our national security,” said Secretary of the Treasury Janet Yellen.
Secretary of Commerce Gina Raimondo, added, “The Advanced Manufacturing Investment Tax Credit, when paired with CHIPS direct funding and loans, provides a comprehensive set of federal incentives to drive the significant investment in semiconductor manufacturing capacity occurring in the United States important to meeting our national and economic security needs.”