KPMG report: Notable highlights from section 48D final regulations (advanced manufacturing investment credit)
KPMG observations and analysis of the final regulations
The U.S. Treasury Department and IRS on October 22, 2024, released the long-awaited final regulations implementing the advanced manufacturing investment tax credit (ITC) under sections 48D and 50 as established by H.R. 4346, “The CHIPS and Science Act of 2022,” to incentivize the manufacture of semiconductors and semiconductor manufacturing equipment within the United States.
Section 48D provides a 25% ITC for a qualified investment in an advanced manufacturing facility, defined in the statute as a facility for which the primary purpose is the manufacturing of semiconductors or semiconductor manufacturing equipment. Read TaxNewsFlash
The final section 48D regulations adopt the March 2023 proposed regulations, with some specific notable revisions and clarifications based on feedback received from commenters in response to those regulations. The final regulations provide clarity around certain key credit eligibility requirements, including the clarification and expansion of definitions, and clarifications of certain recapture provisions.
The final regulations go into effect on December 23, 2024, and apply with respect to property placed in service after December 31, 2022, and in a tax year that ends on or after October 23, 2024.
Read a November 2024 report prepared by KPMG LLP that provides observations and analysis of the final regulations