26 U.S.C. § 48D — Advanced manufacturing investment cred-

Page 372 TITLE 26—INTERNAL REVENUE CODE § 48D 1 See References in Text note below. Recovery and Reinvestment Tax Act of 2009, Pub. L. 111–5, div. B, title I, to which such amendment relates, see section 209(k) of Pub. L. 113–295, set out as a note under section 24 of this title. Amendment by section 221(a)(2)(C) of Pub. L. 113–295 effective Dec. 19, 2014, subject to a savings provision, see section 221(b) of Pub. L. 113–295, set out as a note under section 1 of this title. EFFECTIVE DATE Section applicable to periods after Feb. 17, 2009, under rules similar to the rules of section 48(m) of this title as in effect on the day before Nov. 5, 1990, see section 1302(d) of Pub. L. 111–5, set out as an Effective Date of 2009 Amendment note under section 46 of this title. § 48D. Advanced manufacturing investment cred- it (a) Establishment of credit For purposes of section 46, the advanced manu- facturing investment credit for any taxable year is an amount equal to 25 percent of the qualified investment for such taxable year with respect to any advanced manufacturing facility of an eligi- ble taxpayer. (b) Qualified investment (1) In general For purposes of subsection (a), the qualified investment with respect to any advanced man- ufacturing facility for any taxable year is the basis of any qualified property placed in serv- ice by the taxpayer during such taxable year which is part of an advanced manufacturing facility. (2) Qualified property (A) In general For purposes of this subsection, the term ‘‘qualified property’’ means property— (i) which is tangible property, (ii) with respect to which depreciation (or amortization in lieu of depreciation) is allowable, (iii) which is— (I) constructed, reconstructed, or erected by the taxpayer, or (II) acquired by the taxpayer if the original use of such property commences with the taxpayer, and (iv) which is integral to the operation of the advanced manufacturing facility. (B) Buildings and structural components (i) In general The term ‘‘qualified property’’ includes any building or its structural components which otherwise satisfy the requirements under subparagraph (A). (ii) Exception Clause (i) shall not apply with respect to a building or portion of a building used for offices, administrative services, or other functions unrelated to manufacturing. (3) Advanced manufacturing facility For purposes of this section, the term ‘‘ad- vanced manufacturing facility’’ means a facil- ity for which the primary purpose is the man- ufacturing of semiconductors or semicon- ductor manufacturing equipment. (4) Coordination with rehabilitation credit The qualified investment with respect to any advanced manufacturing facility for any taxable year shall not include that portion of the basis of any property which is attributable to qualified rehabilitation expenditures (as de- fined in section 47(c)(2)). (5) Certain progress expenditure rules made applicable Rules similar to the rules of subsections (c)(4) and (d) of section 46 (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990) shall apply for purposes of subsection (a). (c) Eligible taxpayer For purposes of this section, the term ‘‘eligi- ble taxpayer’’ means any taxpayer which— (1) is not a foreign entity of concern (as de- fined in section 9901(6) 1 of the William M. (Mac) Thornberry National Defense Authoriza- tion Act for Fiscal Year 2021), and (2) has not made an applicable transaction (as defined in section 50(a)) during the taxable year. (d) Elective payment (1) In general Except as otherwise provided in paragraph (2)(A), in the case of a taxpayer making an election (at such time and in such manner as the Secretary may provide) under this sub- section with respect to the credit determined under subsection (a) with respect to such tax- payer, such taxpayer shall be treated as mak- ing a payment against the tax imposed by sub- title A (for the taxable year with respect to which such credit was determined) equal to the amount of such credit. (2) Special rules For purposes of this subsection— (A) Application to partnerships and s cor- porations (i) In general In the case of the credit determined under subsection (a) with respect to any property held directly by a partnership or S corporation, any election under para- graph (1) shall be made by such partner- ship or S corporation. If such partnership or S corporation makes an election under such paragraph (in such manner as the Secretary may provide) with respect to such credit— (I) the Secretary shall make a pay- ment to such partnership or S corpora- tion equal to the amount of such credit, (II) paragraph (3) shall be applied with respect to such credit before determining any partner’s distributive share, or shareholder’s pro rata share, of such credit, (III) any amount with respect to which the election in paragraph (1) is made shall be treated as tax exempt income for purposes of sections 705 and 1366, and (IV) a partner’s distributive share of such tax exempt income shall be based Page 373 TITLE 26—INTERNAL REVENUE CODE § 48D on such partner’s distributive share of the otherwise applicable credit for each taxable year. (ii) Coordination with application at part- ner or shareholder level In the case of any property held directly by a partnership or S corporation, no elec- tion by any partner or shareholder shall be allowed under paragraph (1) with respect to any credit determined under subsection (a) with respect to such property. (B) Elections Any election under paragraph (1) shall be made not later than the due date (including extensions of time) for the return of tax for the taxable year for which the election is made, but in no event earlier than 270 days after the date of the enactment of this sec- tion. Any such election, once made, shall be irrevocable. Except as otherwise provided in this subparagraph, any election under para- graph (1) shall apply with respect to any credit for the taxable year for which the election is made. (C) Timing The payment described in paragraph (1) shall be treated as made on the later of the due date (determined without regard to ex- tensions) of the return of tax for the taxable year or the date on which such return is filed. (D) Treatment of payments to partnerships and s corporations For purposes of section 1324 of title 31, United States Code, the payments under sub- paragraph (A)(i)(I) shall be treated in the same manner as a refund due from a credit provision referred to in subsection (b)(2) of such section. (E) Additional information As a condition of, and prior to, any amount being treated as a payment which is made by the taxpayer under paragraph (1) or any payment being made pursuant to sub- paragraph (A), the Secretary may require such information or registration as the Sec- retary deems necessary or appropriate for purposes of preventing duplication, fraud, improper payments, or excessive payments under this section. (F) Excessive payment (i) In general In the case of any amount treated as a payment which is made by the taxpayer under paragraph (1), or any payment made pursuant to subparagraph (A), which the Secretary determines constitutes an exces- sive payment, the tax imposed on such taxpayer by chapter 1 for the taxable year in which such determination is made shall be increased by an amount equal to the sum of— (I) the amount of such excessive pay- ment, plus (II) an amount equal to 20 percent of such excessive payment. (ii) Reasonable cause Clause (i)(II) shall not apply if the tax- payer demonstrates to the satisfaction of the Secretary that the excessive payment resulted from reasonable cause. (iii) Excessive payment defined For purposes of this subparagraph, the term ‘‘excessive payment’’ means, with re- spect to property for which an election is made under this subsection for any taxable year, an amount equal to the excess of— (I) the amount treated as a payment which is made by the taxpayer under paragraph (1), or the amount of the pay- ment made pursuant to subparagraph (A), with respect to such property for such taxable year, over (II) the amount of the credit which, without application of this subsection, would be otherwise allowable (deter- mined without regard to section 38(c)) under subsection (a) with respect to such property for such taxable year. (3) Denial of double benefit In the case of a taxpayer making an election under this subsection with respect to the cred- it determined under subsection (a), such credit shall be reduced to zero and shall, for any other purposes under this title, be deemed to have been allowed to the taxpayer for such taxable year. (4) Mirror code possessions In the case of any possession of the United States with a mirror code tax system (as de- fined in section 24(k)), this subsection shall not be treated as part of the income tax laws of the United States for purposes of deter- mining the income tax law of such possession unless such possession elects to have this sub- section be so treated. (5) Basis reduction and recapture Rules similar to the rules of subsections (a) and (c) of section 50 shall apply with respect to— (A) any amount treated as a payment which is made by the taxpayer under para- graph (1), and (B) any payment made pursuant to para- graph (2)(A). (6) Regulations The Secretary shall issue such regulations or other guidance as may be necessary or ap- propriate to carry out the purposes of this sub- section, including— (A) regulations or other guidance pro- viding rules for determining a partner’s dis- tributive share of the tax exempt income de- scribed in paragraph (2)(A)(i)(III), and (B) guidance to ensure that the amount of the payment or deemed payment made under this subsection is commensurate with the amount of the credit that would be other- wise allowable (determined without regard to section 38(c)). (e) Termination of credit The credit allowed under this section shall not apply to property the construction of which be- gins after December 31, 2026. Page 374 TITLE 26—INTERNAL REVENUE CODE § 48E (Added Pub. L. 117–167, div. A, § 107(a), Aug. 9, 2022, 136 Stat. 1393.) Editorial Notes REFERENCES IN TEXT The date of the enactment of the Revenue Reconcili- ation Act of 1990, referred to in subsec. (b)(5), is the date of enactment of Pub. L. 101–508, which was ap- proved Nov. 5, 1990. Section 9901(6) of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021, referred to in subsec. (c)(1), means section 9901(6) of Pub. L. 116–283, but probably should be a reference to section 9901(8) of the Act, which defines ‘‘foreign entity of concern’’ and which is classified to section 4651(8) of Title 15, Commerce and Trade. The date of the enactment of this section, referred to in subsec. (d)(2)(B), is the date of enactment of Pub. L. 117–167, which was approved Aug. 9. 2022. PRIOR PROVISIONS A prior section 48D, added Pub. L. 111–148, title IX, § 9023(a), Mar. 23, 2010, 124 Stat. 877, provided for a quali- fying therapeutic discovery project credit, prior to re- peal by Pub. L. 115–141, div. U, title IV, § 401(d)(3)(A), Mar. 23, 2018, 132 Stat. 1209. Statutory Notes and Related Subsidiaries EFFECTIVE DATE Section applicable to property placed in service after Dec. 31, 2022, and, for any property the construction of which begins prior to Jan. 1, 2023, only to the extent of the basis thereof attributable to the construction, re- construction, or erection after Aug. 9, 2022, see section 107(f) of Pub. L. 117–167, set out as an Effective Date of 2022 Amendment note under section 905 of Title 2, The Congress. § 48E. Clean electricity investment credit (a) Investment credit for qualified property (1) In general For purposes of section 46, the clean elec- tricity investment credit for any taxable year is an amount equal to the applicable percent- age of the qualified investment for such tax- able year with respect to— (A) any qualified facility, and (B) any energy storage technology. (2) Applicable percentage (A) Qualified facilities Subject to paragraph (3)— (i) Base rate In the case of any qualified facility which is not described in subclause (I) or (II) of clause (ii) and does not satisfy the requirements described in subclause (III) of such clause, the applicable percentage shall be 6 percent. (ii) Alternative rate In the case of any qualified facility— (I) with a maximum net output of less than 1 megawatt (as measured in alter- nating current), (II) the construction of which begins prior to the date that is 60 days after the Secretary publishes guidance with re- spect to the requirements of paragraphs (3) and (4) of subsection (d), or (III) which— (aa) satisfies the requirements of subsection (d)(3), and (bb) with respect to the construction of such facility, satisfies the require- ments of subsection (d)(4), the applicable percentage shall be 30 per- cent. (B) Energy storage technology Subject to paragraph (3)— (i) Base rate In the case of any energy storage tech- nology which is not described in subclause (I) or (II) of clause (ii) and does not satisfy the requirements described in subclause (III) of such clause, the applicable percent- age shall be 6 percent. (ii) Alternative rate In the case of any energy storage tech- nology— (I) with a capacity of less than 1 mega- watt, (II) the construction of which begins prior to the date that is 60 days after the Secretary publishes guidance with re- spect to the requirements of paragraphs (3) and (4) of subsection (d), or (III) which— (aa) satisfies the requirements of subsection (d)(3), and (bb) with respect to the construction of such property, satisfies the require- ments of subsection (d)(4), the applicable percentage shall be 30 per- cent. (3) Increase in credit rate in certain cases (A) Energy communities (i) In general In the case of any qualified investment with respect to a qualified facility or with respect to energy storage technology which is placed in service within an energy community (as defined in section 45(b)(11)(B)), for purposes of applying para- graph (2) with respect to such property or investment, the applicable percentage shall be increased by the applicable credit rate increase. (ii) Applicable credit rate increase For purposes of clause (i), the applicable credit rate increase shall be an amount equal to— (I) in the case of any qualified invest- ment with respect to a qualified facility described in paragraph (2)(A)(i) or with respect to energy storage technology de- scribed in paragraph (2)(B)(i), 2 percent- age points, and (II) in the case of any qualified invest- ment with respect to a qualified facility described in paragraph (2)(A)(ii) or with respect to energy storage technology de- scribed in paragraph (2)(B)(ii), 10 per- centage points. (B) Domestic content Rules similar to the rules of section 48(a)(12) shall apply.