Moolenaar and Khanna Introduce Bipartisan Bill to Give Tax Breaks for American-Made Magnets
This bill is currently in the early stages of the legislative process after being sent to the House Committee on Ways and Means for review. It is considered active, but no further hearings or votes have been scheduled at this time.
This bill has strong support from both parties and addresses national security concerns about China, but passing new tax credits often requires a larger budget deal.
Scores run from -100 (strongly harmful) to +100 (strongly beneficial) for each group, combining impact, certainty, scope, and duration ratings of 1-5. How impact scoring works
IRS employees would need to administer a complex new credit system involving supply chain verification, arm's-length pricing rules, and coordination with the Departments of Defense, Energy, and Commerce. Treasury staff would need to develop regulations, safe harbors, and review facility designations on a rolling basis.
“The Secretary shall prescribe such regulations or other guidance as may be necessary or appropriate to carry out the purposes of this section.”
Referred to the House Committee on Ways and Means.
Introduced in House
The bill was officially filed and given a number. It now enters the legislative queue.
The Magnets Value Chain Support Act of 2026, introduced by Chairman John Moolenaar and Ranking Member Ro Khanna of the Select Committee on China, tackles the entire production chain from rare earth oxide to finished magnets. The legislation includes a 15% tax credit for American motor manufacturers who source their magnets from domestic suppliers and recognizes breakthrough rare-earth-free technologies like iron nitride as equally important for US industrial policy.
A new bipartisan bill introduced in Congress aims to strengthen America's domestic magnet supply chain, a move with significant implications for the drone industry. The Magnets Value Chain Support Act of 2026 would provide production tax credits for companies involved in rare earth processing and magnet manufacturing, as well as a separate credit for motor manufacturers that purchase qualifying U.S.-produced magnets used in electric motors and actuators.
Congress is considering the Magnets Value Chain Support Act of 2026, which would create the first federal framework offering tax credits of up to 15% to both domestic magnet producers and the manufacturers that use their products. The bill is technology-neutral, allowing rare-earth-free magnets to qualify for credits alongside conventional rare-earth magnets, supporting companies like Niron Magnetics as they build domestic manufacturing facilities.
No votes or related bills recorded for this bill yet.
Document Type
Congressional Bill
Official Title
Magnets Value Chain Support Act of 2026
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