IRS Proposes Direct Payment Rules for CHIPS Act Tax Credit (2)

The IRS and Treasury issued two sets of rules Wednesday for companies that want to receive a direct payment in lieu of the tax credit for research and manufacturing of semiconductor chips.

The first set contains proposed regulations (RIN 1545-BQ75) that clarify how to elect a direct pay option, enumerate pre-filing registration requirements, and address the handling of excessive payments and credit recapture. The second set (RIN 1545-BQ76) are temporary regulations on how to register for the credit.

The proposed rules lay out the treatment of S corporations and partnerships under the tax code’s Section 48 (D), which was added ...