The CHIPS and Science Act: New Incentives for Manufacturing Equipment Investment

Manufacturers across the U.S. are facing higher interest rates, tighter margins, and slower order flow. To help strengthen domestic production, the federal government introduced the CHIPS and Science Act, which includes a 25% Advanced Manufacturing Investment Tax Credit for qualifying projects.

This credit is designed to encourage investment in advanced manufacturing capacity within the United States. While it is best known for supporting semiconductor production, the credit can also apply to equipment used in advanced, technology-driven manufacturing environments, including fabrication, machining, automation, and supporting infrastructure when part of a qualifying project.

Unlike depreciation or standard deductions, the CHIPS credit is a tax credit, meaning it can directly reduce a company’s overall federal tax liability, subject to eligibility and IRS rules.

Many manufacturers may also qualify for Section 179 or bonus depreciation on machinery purchases in the same tax year. These incentives do not stack on the same dollars, but when structured properly, businesses may be able to use depreciation strategies while applying credits to offset other taxable income.

Every project is different, and eligibility depends on how the equipment is used, the nature of the manufacturing operation, and overall tax position. Always consult your CPA or tax advisor to confirm eligibility and proper structuring.

Buying Machinery in 2026?

If your company is considering expanding, upgrading, or modernizing your shop, incentives like these can make now a strategic time to invest in machinery—rather than waiting on lower interest rates that may never arrive.

Looking to buy, sell, or trade machinery? Visit
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or explore our financing options above to make your next investment easier.

🔗 Learn more about the CHIPS and Science Act from the official source:

https://www.chips.gov

Disclaimer: This article is for informational purposes only and is not tax, legal, or financial advice.
Tax credits, deductions, and eligibility requirements vary by business and project. Always consult your CPA or tax advisor.