Chips Bill Tax Perk Opens Timing Eligibility Questions for Pros

The semiconductor tax credit’s passage was seen as a big win to encourage investment, but now tax professionals have questions about the timing to use the credit and how it applies in partnerships.

The CHIPS Act, a $52 billion bill to boost US competitiveness against China, was signed into law Tuesday. It includes a 25% investment tax credit for research and manufacturing of semiconductor chips that can be applied after Dec. 31 and will sunset in 2026. Under the law, some taxpayers can elect to take direct pay or to treat the credit as payment against tax owed.