The CHIPS and Science Act, signed into law earlier this month, includes more than $50 billion in incentives for the manufacturing of semiconductors. The legislation is aimed at boosting the domestic production of semiconductors by incentivizing the construction and expansion of manufacturing facilities or fabrication plants. It also provides a 25% investment tax credit for investments in semiconductor manufacturing and related equipment.

As companies seek to construct or expand these facilities, the associated activities may qualify for federal and state Research & Development (R&D) tax credits. Other activities that may qualify include designing and developing new production methods, tooling, and specialized equipment for fabrication, manufacturing processes, and much more.

What does CohnReznick think?

While companies seek to take advantage of the new incentives in the CHIPS and Science Act, they should also consider the potential benefit of the R&D tax credit for the activities and expenses used in the course of constructing and expanding these new manufacturing capabilities.

Contact

Scott Hamilton, CPA, Partner, National Tax

310.843.8226

Carina Coffey, Manager, National Tax

312.508.5953

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