Rare Earth Magnet Security Act of 2025

The Rare Earth Magnet Security Act of 2025 creates a tax credit for U.S. manufacturers producing rare earth magnets domestically. The credit pays $20 per kilogram for magnets with less than 90% of component materials sourced in the U.S., and $30 per kilogram if at least 90% of materials are domestically produced. The bill restricts the credit for magnets using components from "non-allied foreign nations" (with a temporary exception for certain materials until 2027) and phases out the credit after 2034 (reducing to 70% in 2035, 35% in 2036-2037, and 0% after 2037). The credit applies to taxable years beginning after December 31, 2024.