Rare Earth Magnet Security Act of 2025
Summary
What This Bill Does
The Rare Earth Magnet Security Act of 2025 adds new section 45BB to the Internal Revenue Code. Taxpayers receive a production credit for rare earth magnets they manufacture or produce and sell to an unrelated person during the taxable year, with related-party sales treated as unrelated in specified circumstances or by election subject to anti-duplication and anti-fraud information requirements. The credit amount is $20 per kilogram for U.S.-manufactured rare earth magnets and $30 per kilogram when at least 90 percent by weight of component rare earth materials are produced in the United States. The credit is aimed at rebuilding domestic magnet supply chains used in defense, vehicles, electronics, and clean-energy equipment.
Who Benefits and How
U.S. rare earth magnet manufacturers benefit from a per-kilogram production tax credit. Domestic rare earth material producers benefit because the higher $30 credit rewards magnets with at least 90 percent U.S.-produced rare earth inputs. Defense contractors benefit if domestic magnet supply becomes more available and less dependent on foreign suppliers. Electric vehicle manufacturers benefit from a stronger domestic supply chain for high-performance magnets.
Who Bears the Burden and How
Federal taxpayers bear the revenue cost of the new production credit. The Internal Revenue Service must administer credit eligibility, related-party elections, registration, and anti-fraud rules. Foreign rare earth magnet suppliers may lose market share if domestic producers receive tax support. Credit-claiming manufacturers must document kilograms produced, sale treatment, and rare earth material origin.
Key Provisions
- Creates new section 45BB for rare earth magnet production credits.
- Provides a $20 per kilogram credit for U.S.-manufactured rare earth magnets.
- Provides a $30 per kilogram credit when at least 90 percent of component rare earth materials are U.S.-produced.
- Requires sale, election, registration, and anti-duplication rules for credit eligibility.
Evidence Chain:
This summary is generated from the full bill text using AI analysis. Expand "Detailed Analysis" below for identified beneficiaries/burden bearers with clause-level evidence links.
At a Glance
What This Bill Does
Creates a rare earth magnet production tax credit of $20 per kilogram for U.S.-made magnets and $30 per kilogram when at least 90 percent of component rare earth materials are produced in the United States.
Key Policy Areas
Tax, Critical Minerals, Manufacturing
Primary Purpose
Creates a rare earth magnet production tax credit of $20 per kilogram for U.S.-made magnets and $30 per kilogram when at least 90 percent of component rare earth materials are produced in the United States.
Policy Domains
Resolution provisions
Identified Gains
- U.S. rare earth magnet manufacturers
- Domestic rare earth producers
- Defense contractors
- Electric vehicle manufacturers
Identified Costs
- Federal taxpayers
- Internal Revenue Service
- Foreign rare earth magnet suppliers
- Credit-claiming manufacturers
Sponsors
Legislative Progress
In CommitteeMr. Reschenthaler (for himself, Mr. Swalwell, Mr. Hudson, Ms. Lee …
Referred to the House Committee on Ways and Means.
Introduced in House
Stakeholder Effects
cui bono?How this legislation distributes effects. Mention counts reflect frequency, not effect magnitude.
Bill Structure & Actor Mappings
Who is "The Secretary" in each section?
We use a combination of our own taxonomy and classification in addition to large language models to assess meaning and potential beneficiaries. High confidence means strong textual evidence. Always verify with the original bill text.
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