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    Understanding the Section 45X Tax Credit for Manufacturers

    April 10, 2025
    Section 45X, established with the Inflation Reduction Act, is a tax credit for businesses that manufacture and sell energy components. Here’s how to qualify, what qualifying energy components are, and how to calculate and claim the tax incentive.

    The Inflation Reduction Act of 2022 (IRA) established a collection of interrelated tax credits and incentives supporting domestic clean and renewable energy production. A crucial aspect of that legislation — the Advanced Manufacturing Production Creditunder Section 45X — supports the domestic production of equipment and components (solar, wind, batteries, and inverters) and critical minerals. Importantly, this credit incentivizes the manufacturing of equipment required by those seeking to take advantage of many other credits included in the IRA. Thus, the Section 45X credit is the linchpin for the achievement of numerous goals of that legislation. Our tax professionals evaluate the technical details of this credit and describe the paths available for businesses to benefit.

     

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