What does Preamble of Magnets Value Chain Support Act of 2026 do?

This bill aims to amend the Internal Revenue Code of 1986 The amendment is intended to incentivize domestic production and use of permanent magnets

What does SHORT TITLE. of Magnets Value Chain Support Act of 2026 do?

This bill is formally titled the Magnets Value Chain Support Act of 2026.

What does CONGRESSIONAL FINDINGS. of Magnets Value Chain Support Act of 2026 do?

The US is dependent on foreign sources for magnet metals and permanent magnets. The PRC government has a strategy to dominate the rare earth supply chain. Domestic metallization and magnet-manufacturing capabilities need restoration. Motors, generators, and electronics rely heavily on permanent magnets. Reshoring the magnet supply chain requires upstream and downstream incentives. Competitive market incentives are necessary to counter non-market foreign production.

What does ESTABLISHMENT OF MAGNET VALUE CHAIN SUPPORT CREDIT. of Magnets Value Chain Support Act of 2026 do?

This section establishes the Magnet Value Chain Support Credit under Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986. The credit is calculated as the sum of the permanent magnet production credit, the magnet metal production credit, and the rare earth oxide production credit. The permanent magnet production credit ranges from $20 to $40 per kilogram, depending on factors like whether the magnet is rare earth-free, the percentage of magnet metal inputs produced in the U.S. or a partner country, and its performance level. The magnet metal production credit ranges from $15 to $25 per kilogram, based on the percentage of rare earth oxides or metallic precursors produced in the U.S. or a partner country. The rare earth oxide production credit is $5 per kilogram. Taxpayers must certify they maintain domestic production capacity and comply with requirements related to the Defense Priorities and Allocations System or contracts under chapter 137 of title 10, United States Code. The credit is not allowed for materials produced for stockpiling, resale, or export, with some exceptions for exports to partner countries or sales to the U.S. Government. Taxpayers must submit detailed information regarding the origin and processing locations of materials used in eligible production steps.

What does ESTABLISHMENT OF DOMESTIC MAGNET INPUT USAGE CREDIT. of Magnets Value Chain Support Act of 2026 do?

This section establishes a domestic magnet input usage credit. The credit applies to qualified domestic magnet expenditures for manufacturing covered products in the United States. The applicable percentage of the credit varies by taxable year, with rates of 15%, 10%, and 5% applying to different periods. Qualified domestic magnet expenditures must meet certain criteria, including being manufactured in the United States and not sourced from prohibited foreign entities. The credit is allowed as part of the general business credit and applies to taxable years beginning after December 31, 2026.

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Magnets Value Chain Support Act of 2026

Last updated: 6/9/2026 · Introduced: 6/9/2026

Author: John Moolenaar (R-MI)

TL;DR (AI)

The bill establishes the Magnet Value Chain Support Credit to incentivize domestic production of permanent magnets, with credits ranging from $20 to $40 per kilogram for permanent magnet production, $15 to $25 per kilogram for magnet metal production, and $5 per kilogram for rare earth oxide production.
A domestic magnet input usage credit is created to encourage the use of domestically produced magnet inputs in manufacturing covered products in the United States, with applicable credit rates varying by taxable year.
Taxpayers must certify they maintain domestic production capacity and comply with certain requirements to be eligible for these credits, which are not allowed for materials produced for stockpiling, resale, or export, with some exceptions.

119th Congressin committeeOfficial page

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Includes provisions on preamble, short title., and 3 more.

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