Rare Earth Magnet Security Act of 2025

Increased Incentives for Domestic Manufacturing: The bill provides a tax credit of $20 per kilogram for magnets produced in the U.S., or $30 per kilogram if 90 percent of the component materials are also produced domestically (Section 2(a)(1) and Section 2(b)(1)).

Support for Technological and National Security Facilities: The Secretary may allow exceptions to coercivity requirements for "eligible manufacturers" who receive grants or contracts from the Department of Energy or Department of Defense and commit to building domestic facilities that show national security or supply chain merit (Section 2(d)(3)).

Financial Flexibility for Taxpayers: Taxpayers can elect to receive the credit as a payment, which can be treated as being made on the later of the tax return due date or the date the return is filed (Section 2(e)).

Phasing Out of Financial Support: The credit amount decreases over time, specifically hitting 70 percent in 2035, 35 percent in 2036 and 2037, and reaching 0 percent after December 31, 2037 (Section 2(b)(2)).

Restrictions on Sourcing Materials: Taxpayers may be ineligible for the credit if any component rare earth material used in manufacturing is produced in a non-allied foreign nation, though some materials have a delayed restriction (Section 2(d)(1)).

Regulatory Oversight and Requirements: The Secretary may require specific information or registration from taxpayers to prevent fraud, duplication, or improper amounts when certain elections are made (Section 2(a)(2)(B)(ii)).