The federal government offers various tax credits through bureaus and agencies to support manufacturers.
Department of Energy
Solar Energy Technologies Office Federal Solar Tax Credit Resources
The U.S. Department of Energy (DOE) Solar Energy Technologies Office (SETO) developed three resources to help Americans navigate changes to the federal solar Investment Tax Credit (ITC), which was expanded in 2022 through the passage of the Inflation Reduction Act (IRA). These resources—for homeowners, businesses, and manufacturers—provide thorough overviews of the ITC, Production Tax Credit (PTC), and Advanced Manufacturing Production Tax Credit (MPTC). They demystify the tax code with intuitive explanations and examples, answer frequently asked questions, and explain the process of claiming the tax credits.
Biodiesel Income Tax Credit
A taxpayer that delivers pure, unblended biodiesel (B100) into the tank of a vehicle or uses B100 as an on-road fuel in their trade or business may be eligible for an incentive in the amount of $1.00 per gallon of biodiesel, agri-biodiesel, or renewable diesel.
Department of Treasury
Clean Fuel Production Credit
Beginning January 1, 2025, the Treasury Department will offer tax credits for the production and sale of low emission transportation fuels, including sustainable aviation fuel (SAF). The tax credit amount is $0.20 per gallon for non-aviation fuel and $0.35 per gallon for SAF.
Internal Revenue Service (IRS)
Deferral of active income of controlled foreign corporations
The Subpart F provisions eliminate deferral of U.S. tax on some categories of foreign income by taxing certain U.S. persons currently on their pro rata share of such income earned by their controlled foreign corporations (CFCs). This approach is based on the principles underlying the United States' taxing jurisdiction. In general, the United States does not tax a foreign corporation if the foreign corporation neither receives U.S.-source income nor engages in U.S.-based activities. However, the U.S. does generally tax all income, wherever derived, of U.S. persons. The Subpart F rules operate by treating a U.S. shareholder of a CFC as if it actually received its proportionate share of certain categories of the corporation’s current earnings and profits (E&P). The U.S. shareholder is required to report this income currently in the United States whether or not the CFC actually makes a distribution (I.R.C. § 951(a)).
Accelerated depreciation for certain capital assets, including bonus depreciation
Bonus depreciation is a tax incentive that allows a business to immediately deduct a large percentage of the purchase price of eligible assets, such as machinery, rather than write them off evenly over their useful life.
Research Credit
Use Form 6765 to figure and claim the credit for increasing research activities, to elect the reduced credit under section 280C, and to elect to claim a certain amount of the credit as a payroll tax credit against the employer portion of social security taxes.
Sustainable Aviation Fuel Credit
The sustainable aviation fuel (SAF) credit applies to certain fuel mixtures that contain SAF sold or used after December 31, 2022, and before January 1, 2025. The Inflation Reduction Act of 2022 (Public Law 117-169, 136 Stat. 1818) created the credit.
Clean Hydrogen Production Tax Credit
The Inflation Reduction Act (IRA) of 2022 provides a production credit for each kilogram of qualified clean hydrogen produced by a taxpayer at a qualified clean hydrogen production facility. The credit amount is dependent on the emissions intensity of the hydrogen production process and the taxpayer's compliance with prevailing wage and apprenticeship requirements during the qualified clean hydrogen production facility's construction, alteration, and repair.
Commercial Clean Vehicle Credit
Businesses and tax-exempt organizations that buy a qualified commercial clean vehicle may qualify for a clean vehicle tax credit of up to $40,000 under Internal Revenue Code (IRC) 45W. If you're a manufacturer of eligible clean vehicles, including electric vehicles (EVs), plug-in hybrid vehicles (PHEVs) and fuel cell electric vehicles, to qualify those vehicles for clean vehicle tax credits you must enter into a written agreement with the IRS and report information for each eligible clean vehicle you manufacture through the IRS Energy Credits Online (ECO) portal.
Small Business Administration
48D semiconductor tax credit
Discover how the advanced manufacturing investment tax credit (48D credit) can help grow your semiconductor manufacturing small business.