Advanced Manufacturing Production Credit (Section 45X)

Key metadata

Document number

irs-advanced-manufacturing-production-credit-page

Type

Guidance Page

Publication date

2026-02-14

Agencies

Treasury Department, Internal Revenue Service

CFR references

26 CFR part 1

Original source

IRS guidance page

IRS 45X Credit: US Battery Manufacturing Incentives (IRA 2022)

The Inflation Reduction Act (IRA) of 2022 established the Advanced Manufacturing Production Credit (45X), a significant tax incentive for domestic production of key clean energy components. What's Available: This credit directly rewards manufacturers for producing eligible components in the United States or its Possessions. For the battery and grid storage sector, this specifically includes Qualifying Battery Components and Electrode Active Materials. The credit amount is based on the volume of these components produced and sold to an unrelated party (or via specific related-party election rules).

Why it matters

This credit is a direct financial incentive to build and expand domestic manufacturing capacity for battery components. It significantly lowers the cost of producing critical materials and parts for batteries within the U.S., supporting supply chain resilience and reducing reliance on foreign sources. This directly impacts the economics of battery cell and pack production, which are vital for grid storage, electric vehicles, and other clean energy applications. It strongly promotes domestic content and advanced manufacturing in the battery sector.

Who is affected

U.S. manufacturers producing these eligible battery components and electrode active materials. Key Practicalities & How to Claim: Direct Pay/Transferability: A major benefit is the option for manufacturers to receive the credit as a direct payment from the IRS (elective payment) or to transfer the credit to another taxpayer. This means companies can benefit even if they don't have sufficient tax liability to offset. Process: To claim, manufacturers must register with the IRS using the IRA/CHIPS Pre-filing Registration Tool and file Form 7207 with their annual tax return. Important Note: A facility that has already claimed the 48C Advanced Energy Project credit is ineligible for the 45X credit. This requires strategic decision-making for new or expanding facilities. Timing: The credit was established by the IRA in 2022 and is available for eligible production going forward. There are no new deadlines or comment periods mentioned in this update; it describes an existing, ongoing incentive.