Advanced Manufacturing Project Credit 45X

What qualifies

Manufacturing of components for solar and wind energy, inverters, battery components, and critical minerals. The credit aims to make the domestic production of the components in these industries cost-competitive with international manufacturing.

Incentive value

The credit is determined by the production quantity for each technology. Click here to find a specific credit value for the component you are interested in manufacturing.

You may transfer the credit by selling all or a portion of the tax credit to an unrelated taxpayer.

Direct pay is available for tax-exempt organizations.

You may not combine the Qualifying Advanced Energy Project 48C with the Advanced Energy Project Credit 45X for the same facility.

Who is eligible

Domestic manufacturers and tax-exempt entities. 

When the credit is available

Credit for critical minerals is permanent starting in 2023. For other items, the full credit is available from 2023 through 2029 and phases down from 2030 through 2032.

How to claim the credit

Form 7207 is used to claim the advanced manufacturing production credit under section 45X for eligible components produced and sold. Partners, S corporation shareholders, and beneficiaries of estates and trusts are generally not required to file Form 7207 if their only source for the credit is the pass-through entity. Instead, they can report this credit directly on Form 3800, General Business Credits.

Tax-exempt entities should follow the instructions for direct pay. Preregister with the IRS and submit annual tax paperwork, typically a Form 990-T for most entities that don’t normally file a tax return.

Organizations that wish to transfer their tax credits must pre-register with the IRS before the tax return is due and receive a registration number.

For more information, see section 45X and Notice 2022-47.

Disclaimer: None of the information presented on this website should be considered official legal or financial advice. Please contact a licensed tax professional for additional information.