Magnets Value Chain Support Act of 2026
Sponsored By: Representative Moolenaar, John R. [R-MI-2]
Introduced
Summary
Tax-based incentives to rebuild U.S. magnet supply chains. This bill would create a Magnet Value Chain Support Credit plus a separate domestic input usage credit to drive domestic production of permanent magnets, magnet metals, and rare earth oxides.
Show full summary
- Would let U.S. producers claim fixed per-kilogram credits for eligible production steps, with larger payments for meeting 75% and 90% domestic-content-by-weight thresholds.
- Would tie incentives to national-security priorities, bar credits for materials linked to prohibited foreign entities, and allow Treasury to grant short waivers of up to 90 days with reporting to Congress.
- Would fold the new credit into the general business credit rules, force an irrevocable choice between this credit and Sec. 45X for the same material year, require detailed supplier and offtake disclosures, and include recapture and anti-abuse measures.
Effective provisions would apply to taxable years beginning after December 31, 2026, and the credit section would terminate for tax years beginning after December 31, 2038.
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Bill Overview
Analyzed Economic Effects
3 provisions identified: 3 benefits, 0 costs, 0 mixed.
Make magnet credits transferable
The bill would add both magnet credits to the general business credit rules. It would also let the magnet production credit be treated under payee-credit (transfer) rules so businesses can transfer or use the credit more easily. These changes would apply to tax years starting after December 31, 2026.
Per‑kg tax credit for magnet makers
This bill would create a Magnet Value Chain Support Credit for U.S. production of permanent magnets, magnet metals, and qualified rare earth oxides. Credit rates are per kilogram and tiered by magnet type and domestic-content: examples listed include $20/kg, $30/kg, $33/kg, and $40/kg for different magnet categories. Magnet metal credits include $15/kg and $25/kg tiers, and qualified rare earth oxide credit is $5/kg. The credit would apply to tax years starting after December 31, 2026 and generally end for years starting after December 31, 2038. To claim it you would need to meet 75% or 90% by-weight domestic-content gates, avoid materials from prohibited foreign entities (waivers limited to 90 days), submit detailed supplier and volume disclosures, and make an irrevocable yearly election if you also could use section 45X for the same material.
Tax credit for buying U.S. magnets
This bill would create a Domestic Magnet Input Usage Credit for firms that buy qualifying U.S.-made permanent magnets for covered manufacturing. The credit rate would phase down over time: 15% for tax years beginning before January 1, 2035; 10% for years beginning in 2035–2036; and 5% for years beginning in 2037–2038. The credit would only cover purchases from unrelated sellers, requires proof of supplier, price, quantity, and country of production, and is barred if any relevant input was made by a prohibited foreign entity. You could not claim this credit for any purchase you already deducted on your tax return. The rule would apply to tax years starting after December 31, 2026 and stop for years starting after December 31, 2038.
Sponsors & CoSponsors
Sponsor
Moolenaar, John R. [R-MI-2]
MI • R
Cosponsors
Rep. Khanna, Ro [D-CA-17]
CA • D
Sponsored 6/9/2026
Rep. Krishnamoorthi, Raja [D-IL-8]
IL • D
Sponsored 6/24/2026
Roll Call Votes
No roll call votes available for this bill.
View on Congress.gov