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Instructions for Form 7207

Instructions for Form 7207, Advanced Manufacturing Production Credit

Rev. January 2024

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Department of the Treasury  
Internal Revenue Service  
Instructions for Form 7207  
Advanced Manufacturing Production Credit  
(Rev. January 2024)  
Section references are to the Internal Revenue Code  
unless otherwise noted.  
File a separate Form 7207 for each facility operated to  
produce and sell eligible components. This also applies to  
applicable entities, partnerships, S corporations, estates,  
and trusts that produce eligible components. Partners, S  
corporation shareholders, and beneficiaries of estates and  
trusts are generally not required to file Form 7207 if their  
only source for the credit is the pass-through entity.  
Instead, they can report this credit directly on Form 3800,  
General Business Credits. If the partner, S corporation  
shareholder, or beneficiary is, itself, a pass-through entity,  
see Line 7, later.  
Future Developments  
For the latest information about developments related to  
Form 7207 and its instructions, such as legislation  
enacted after they were published, go to IRS.gov/  
What’s New  
Facility information. Separate information and  
computation of the advanced manufacturing production  
credit for each facility are required. See Part I. Facility  
Information, later.  
Tax-exempt and governmental entities. For tax years  
beginning after 2022, applicable entities (such as certain  
tax-exempt and governmental entities) can elect to treat  
the advanced manufacturing production credit as a  
payment of tax. See Applicable Entities, later.  
Electing taxpayers. For tax years beginning after 2022,  
taxpayers, partnerships, and S corporations electing to be  
treated as applicable entities can elect to treat the  
advanced manufacturing production credit as a payment  
of income tax. See Electing Taxpayers.  
Transfer of advanced manufacturing production  
credit. For tax years beginning after 2022, eligible  
taxpayers, partnerships, and S corporations that do not  
elect payment can elect to transfer all or part of the credit  
amount otherwise allowed as a general business credit to  
an unrelated third-party buyer in exchange for cash.  
Eligible taxpayers don't include applicable entities and  
electing taxpayers. See Credit Transfers, later.  
Applicable Entities  
For tax years beginning after 2022, applicable entities as  
defined under section 6417(d)(1)(A) that generally don't  
benefit from income tax credits can elect to treat the  
advanced manufacturing production credit as a payment  
of income tax. Resulting overpayments may result in  
refunds.  
Applicable entities making the elective payment  
election for advanced manufacturing production credit  
must file the following:  
Form 7207;  
Form 3800; and  
Form 990-T, Exempt Organization Business Income Tax  
Return, or other applicable income tax return.  
For a discussion of what is an applicable entity, see  
Elective Payment Elections and Transfer Elections in the  
Instructions for Form 3800. For more information on  
elective payment elections under section 6417, see  
Elective Payment of Certain Business Credits Under  
Section 6417 or Section 48D in the Instructions for Form  
3800.  
Pre-filing registration. The IRS has established a  
pre-filing registration process that must be completed prior  
to electing payment or transfer of the credit for the  
production and sale of eligible components at a facility.  
and Transfers, later.  
Parts III and IV. These new parts are used to report  
information for each produced vessel sold and information  
for each applicable critical element produced and sold.  
Electing Taxpayers  
If you aren’t an applicable entity, you can elect to treat  
the credit as a payment of taxes on your return. Section  
6417(d)(1)(D) allows electing taxpayers, including  
partnerships and S corporations, to treat the advanced  
manufacturing production credit as a payment of taxes.  
For a discussion of who is considered an electing  
taxpayer, see the last 3 paragraphs under Applicable  
entity making an elective payment election on IRA 2022  
credits in the Instructions for Form 3800. For more  
information on elective payment elections under section  
6417, see Elective Payment of Certain Business Credits  
Under Section 6417 or Section 48D in the Instructions for  
Form 3800.  
General Instructions  
Purpose of Form  
Form 7207 is used to claim the advanced manufacturing  
production credit under section 45X for eligible  
components produced by the taxpayer within the United  
States (including U.S. territories) and sold during the tax  
year in the taxpayer’s trade or business to unrelated  
persons.  
If you make a section 6417(d)(1)(D) election, your  
election generally applies for 2023 and the 4 succeeding  
years (unless you revoke your election). You must obtain  
an IRS-issued registration number for the facility in 2023  
and each of the succeeding years.  
For more information, see section 45X and Notice  
Jan 26, 2024  
Cat. No. 93469V  
   
Credit Transfers  
Specific Instructions  
For tax years beginning after 2022, under section 6418,  
eligible taxpayers, partnerships, and S corporations that  
do not elect payment can elect to transfer all or a part of  
the credit figured in Part II to an unrelated third-party buyer  
in exchange for cash. For more information on credit  
transfers, see Transfer of Eligible Credits Under Section  
6418 in the Instructions for Form 3800.  
Part I—Facility Information  
If you are claiming the advanced manufacturing  
production credit for eligible components produced at a  
facility and sold to an unrelated person, you must  
complete Part I—Facility Information.  
Line 1. If applicable, enter your pre-filing registration  
number which you received from the IRS. See Pre-Filing  
earlier.  
Line 3. Enter the address of the facility, the owner’s  
name, and taxpayer identification number (if different from  
filer), and a detailed technical description of the facility in  
which the eligible components that are sold to unrelated  
persons are produced.  
Pre-Filing Registration Requirement  
for Payments and Transfers  
Before you file your tax return, if you intend to make an  
elective payment election or transfer election on Form  
3800 for the credit in Part II, you must complete a pre-filing  
registration for each manufacturing facility. To register, go  
Payment-or-Transfer-of-Credits. See Pub. 5884, Inflation  
Reduction Act (IRA) and CHIPS Act of 2022 (CHIPS)  
Pre-Filing Registration Tool. Also see Elective Payment  
Elections and Transfer Elections in the Instructions for  
Form 3800.  
Line 4. Enter the coordinates of the facility.  
Line 5. Check to indicate if you made an election under  
section 45X(a)(3)(B) to have a sale of components to a  
related person be deemed to have been made to an  
unrelated person. See Special Rules, earlier, concerning  
qualified sales and related person rules.  
Line 6. You can't claim the advanced manufacturing  
production credit for eligible components produced using  
any property that is part of a facility for which a credit  
under section 48C was previously taken after August 16,  
2022.  
Special Rules  
Qualified sales. Sales of eligible components qualify  
under section 45X only with respect to eligible  
components, the production of which is within the United  
States or U.S. territories, including continental shelf areas  
described in sections 638(1) and 638(2).  
A person is treated as having sold an eligible  
If you check “Yes” on line 6, you must maintain  
sufficient records to show that you did not include sales of  
eligible components produced at a section 48C advanced  
energy project.  
component to an unrelated person if such component is  
integrated, incorporated, or assembled into another  
eligible component that is sold to an unrelated person.  
For purposes of the advanced manufacturing  
production credit, section 45X(d)(1) provides that persons  
are treated as related to each other if such persons would  
be treated as a single employer under the regulations  
prescribed under the common control rules of section  
52(b).  
Part II—Eligible Components  
Eligible component. Eligible components are certain  
solar energy components, wind energy components,  
inverters, qualifying battery components, and applicable  
critical minerals.  
Line 1. Solar energy eligible components are the  
following.  
For the latest information concerning qualified sales  
and related person rules, see IRS.gov/Form7207.  
If you made an election to treat a sale of  
Line 1a. Photovoltaic cell is the smallest  
components to a related person as made to an  
!
semiconductor element of a solar module which performs  
the immediate conversion of light into electricity.  
CAUTION  
unrelated person, you must maintain and preserve  
records of qualified sales.  
Line 1b. Photovoltaic wafer is a thin slice, sheet, or  
layer of semiconductor material of at least 240 square  
centimeters produced by a single manufacturer either  
directly from molten or evaporated solar grade polysilicon  
or deposition of solar grade thin film semiconductor  
photon absorber layer, or through formation of an ingot  
from molten polysilicon and subsequent slicing, and which  
comprises the substrate or absorber layer of one or more  
photovoltaic cells.  
Phase out. The credit for advanced manufacturing  
production will phase out for eligible components sold  
after 2029, except applicable critical minerals. For  
phase-out years, the credit amount is equal to the product  
of the amount determined in lines 1 through 6 of Form  
7207 multiplied by the following phase-out percentages.  
Tax year sold  
Phase-out percentages  
Line 1c. Polymeric backsheet is a sheet on the back  
Sold during calendar year 2030  
Sold during calendar year 2031  
Sold during calendar year 2032  
Sold after December 31, 2032  
75%  
50%  
25%  
0%  
of a solar module which acts as an electric insulator and  
protects the inner components of such module from the  
surrounding environment.  
Line 1d. Solar grade polysilicon is a silicon which is  
suitable for use in photovoltaic manufacturing, and purified  
to a minimum purity of 99.999999% silicon by mass.  
Line 1e. Solar module is the connection and  
lamination of photovoltaic cells into an environmentally  
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Inst. for Form 7207 (1-2024)  
       
protected final assembly which is suitable to generate  
electricity when exposed to sunlight, and ready for  
installation without an additional manufacturing process.  
components to the seafloor using fixed platforms such as  
offshore wind monopiles, jackets, or gravity-based  
foundations, or floating platforms and associated mooring  
systems.  
Column (d) for lines 2b–2f. Aggregate capacity is  
determined by multiplying the number of eligible  
components produced and sold during the tax year by the  
rated capacity of each wind turbine for which the  
component was produced.  
For example, if you produced and sold 3 blades for a  
6-million-watt wind turbine and 3 blades were sold for a  
10-million-watt wind turbine, the aggregate capacity is 48  
million ((3 x 6 million) plus (3 x 10 million)). Enter  
48,000,000 on line 2b, column (d).  
Line 3. Inverter eligible components are the  
following.  
Line 1f. Torque tube means a structural steel support  
element (including longitudinal purlins) which is part of a  
solar tracker, is of any cross-sectional shape, may be  
assembled from individually manufactured segments,  
spans longitudinally between foundation posts, supports  
solar panels and is connected to a mounting attachment  
for solar panels (with or without separate module interface  
rails), and is rotated by means of a drive system. Solar  
tracker means a mechanical system that moves solar  
modules according to the position of the sun and to  
increase energy output.  
Line 1g. Structural fastener means a component  
which is used to connect the mechanical and drive system  
components of a solar tracker to the foundation of such  
solar tracker, to connect torque tubes to drive assemblies,  
or to connect segments of torque tubes to one another.  
Solar tracker means a mechanical system that moves  
solar modules according to the position of the sun and to  
increase energy output.  
Inverter means an end product which is suitable to  
convert direct current electricity from one or more solar  
modules or certified distributed wind energy systems into  
alternating current electricity.  
Line 3a. Central inverter means an inverter which is  
suitable for large utility-scale systems and has a capacity  
which is greater than 1,000 kilowatts (expressed on a per  
alternating current watt basis).  
Column (d) for lines 1a and 1e. Aggregate capacity  
is determined by multiplying the number of eligible  
components sold during the tax year (thin film photovoltaic  
cells, crystalline photovoltaic cells or solar modules,  
line 1a or 1e) by the wattage capacity of each respective  
component.  
For example, if you produced and sold 500 100-watt  
thin film photovoltaic cells (500 x 100 = 50,000) and 1,500  
200-watt crystalline photovoltaic cells (1,500 x 200 =  
300,000), the reportable aggregate capacity in line 1,  
column (d), is 350,000 (50,000 + 300,000).  
The line 1e, column (d), aggregate capacity is  
calculated in a similar manner. If you sold 300 100-watt  
solar modules (300 x 100 = 30,000) and 400 200-watt  
solar modules (400 x 200 = 80,000), the aggregate  
capacity on line 1e, column (d), is 110,000 (30,000 +  
80,000).  
Enter on lines 1b, 1c, 1d, 1f, and 1g the number of solar  
energy component units sold, as specified in column (b)  
units of measurement.  
Line 3b. Utility inverter means an inverter which is  
suitable for commercial or utility-scale systems, has a  
rated output of not less than 600 volt three-phase power,  
and has a capacity greater than 125 kilowatts and not  
greater than 1,000 kilowatts (expressed on a per  
alternating current watt basis).  
Line 3c. Commercial inverter means an inverter  
which is suitable for commercial or utility-scale  
applications, has a rated output of 208, 480, 600, or 800  
volt three-phase power, and has a capacity which is not  
less than 20 kilowatts and not greater than 125 kilowatts  
(expressed on a per alternating current watt basis).  
Line 3d. Residential inverter means an inverter which  
is suitable for a residence, has a rated output of 120 or  
240 volt single-phase power, and has a capacity which is  
not greater than 20 kilowatts (expressed on a per  
alternating current watt basis).  
Line 3e. Microinverter means an inverter which is  
suitable to connect with one solar module, has a rated  
output of 120 or 240 volt single-phase power, or 208 or  
480 volt three-phase power, and has a capacity which is  
not greater than 650 watts (expressed on a per alternating  
current watt basis).  
Line 2. Wind energy components are the following.  
Line 2a. Related offshore wind vessel is any vessel  
which is purpose-built or retrofitted for purposes of the  
development, transport, installation, operation, or  
maintenance of offshore wind energy components.  
Line 3f. Distributed wind inverter means an inverter  
which is used in a residential or non-residential system  
which utilizes one or more certified distributed wind  
energy systems, and has a rated output of not greater  
than 150 kilowatts. A “certified distributed wind energy  
system” is certified by an accredited certification agency  
to meet standard 9.1-2009 of the American Wind Energy  
Association (including any subsequent revisions to or  
modifications of such standard which have been approved  
by the American National Standards Institute).  
Complete Part III, lines 1–49, with sales prices for any  
eligible offshore wind vessels produced and sold. Enter  
the total from Part III on line 2a, column (d).  
Line 2b. Blade means an airfoil-shaped blade which is  
responsible for converting wind energy to low-speed  
rotational energy.  
Line 2c. Nacelle is the assembly of the drivetrain and  
other tower-top components of a wind turbine (with the  
exception of the blades and the hub) within their cover  
housing.  
Column (d) for lines 3a–3f. The inverter component  
aggregate capacity is determined by multiplying the  
number of eligible components sold by the capacity of  
each component (expressed on a per alternating current  
watt basis).  
Line 2d. Tower is a tubular or lattice structure which  
supports the nacelle and rotor of a wind turbine.  
Lines 2e and 2f. Offshore wind foundation is the  
component (including transition piece) which secures an  
offshore wind tower and any above-water turbine  
Inst. for Form 7207 (1-2024)  
3
For example, you produce and sell 50 central inverters  
and each central inverters’ capacity in watts (AC) is 1,000.  
In addition, you produce and sell 100 central inverters and  
each of those central inverter’s capacity in watts (AC) is  
2,500. Multiply 50 x 1,000 (50,000) and 100 x 2,500  
(250,000) to determine total aggregate capacity of  
300,000 (50,000 + 250,000) for line 3a, column (d).  
Cerium which is converted to cerium oxide which is  
purified to a minimum purity of 99.9% cerium oxide by  
mass, or purified to a minimum purity of 99% cerium by  
mass.  
Cesium which is converted to cesium formate or  
cesium carbonate, or purified to a minimum purity of 99%  
cesium by mass.  
Chromium which is converted to ferrochromium  
Line 4. Electrode active material means cathode  
materials, anode materials, anode foils, and  
consisting of not less than 60% chromium by mass, or  
purified to a minimum purity of 99% chromium by mass.  
electrochemically active materials including solvents,  
additives, and electrolyte salts that contribute to the  
electrochemical processes necessary for energy storage.  
Cobalt which is converted to cobalt sulfate, or purified  
to a minimum purity of 99.6% cobalt by mass.  
Dysprosium which is converted to not less than 99%  
Enter in line 4a, column (d), the costs incurred for  
pure dysprosium iron alloy by mass, or purified to a  
minimum purity of 99% dysprosium by mass.  
electrode active materials sold.  
Europium which is converted to europium oxide which  
Line 5. Battery eligible components are the  
following.  
is purified to a minimum purity of 99.9% europium oxide  
by mass, or purified to a minimum purity of 99% by mass.  
Line 5a. Battery cell means an electrochemical cell  
Fluorspar which is converted to fluorspar which is  
comprised of one or more positive electrodes and one or  
more negative electrodes, with an energy density of not  
less than 100 watt-hours per liter, and capable of storing  
at least 12 watt-hours of energy with a capacity-to-power  
ratio not exceeding 100:1.  
purified to a minimum purity of 97% calcium fluoride by  
mass, or purified to a minimum purity of 99% fluorspar by  
mass.  
Gadolinium which is converted to gadolinium oxide  
which is purified to a minimum purity of 99.9% gadolinium  
oxide by mass, or purified to a minimum purity of 99%  
gadolinium by mass.  
Lines 5b and 5c. Battery module means a module  
(a) in the case of a module using battery cells, with two or  
more battery cells which are configured electrically, in  
series or parallel, to create voltage or current, as  
appropriate, to a specified end use; or (b) with no battery  
cells. To be eligible, either type of battery module must  
have an aggregate capacity of not less than 7  
kilowatt-hours (or, in the case of a module for a hydrogen  
fuel cell vehicle, not less than 1 kilowatt-hour) with a  
capacity-to-power ratio not exceeding 100:1.  
Germanium which is converted to germanium  
tetrachloride, or purified to a minimum purity of 99.99%  
germanium by mass.  
Graphite which is purified to a minimum purity of 99.9%  
graphitic carbon by mass.  
Indium (1) which is converted to (a) indium tin oxide or  
(b) indium oxide which is purified to a minimum purity of  
99.9% indium oxide by mass, or (2) which is purified to a  
minimum purity of 99% indium by mass.  
Capacity-to-power ratio means, with respect to a  
battery cell or battery module, the ratio of the capacity of  
the cell or module to the maximum discharge amount of  
cell or module.  
Column (d) for lines 5a–5c. The aggregate capacity  
of eligible battery components is determined by  
multiplying the number of eligible components produced  
and sold by the capacity of each component expressed on  
a kilowatt-hour basis.  
For example, you produce and sell 50 battery cells and  
each battery cell has a capacity of 12 kilowatt-hours. In  
addition, you produce and sell 100 battery cells and each  
of those battery cells has a capacity of 15 kilowatt-hours.  
Multiply 50 x 12 (600) and 100 x 15 (1,500) to determine  
total aggregate capacity of 2,100 kilowatt-hours for  
line 5a, column (d).  
Lithium which is converted to lithium carbonate or  
lithium hydroxide, or purified to a minimum purity of 99.9%  
lithium by mass.  
Manganese which is converted to manganese  
sulphate, or purified to a minimum purity of 99.7%  
manganese by mass.  
Neodymium which is converted to  
neodymium-praseodymium oxide which is purified to a  
minimum purity of 99% neodymium-praseodymium oxide  
by mass, converted to neodymium oxide which is purified  
to a minimum purity of 99.5% neodymium oxide by mass,  
or purified to a minimum purity of 99.9% neodymium by  
mass.  
Nickel which is converted to nickel sulphate, or purified  
to a minimum purity of 99% nickel by mass.  
Niobium which is converted to ferronibium, or purified  
Line 6. Critical minerals are the following.  
to a minimum purity of 99% niobium by mass.  
Tellurium which is converted to cadmium telluride, or  
Aluminum which is converted from bauxite to a  
minimum purity of 99% alumina by mass, or purified to a  
minimum purity of 99.9% aluminum by mass.  
purified to a minimum purity of 99% tellurium by mass.  
Tin which is purified to low alpha emitting tin which has  
Antimony which is converted to antimony trisulfide  
a purity of greater than 99.99% by mass, and possesses  
an alpha emission rate of not greater than 0.01 counts per  
hour per centimeter square.  
concentrate with a minimum purity of 90% antimony  
trisulfide by mass, or purified to a minimum purity of  
99.65% antimony by mass.  
Tungsten which is converted to ammonium  
Barite which is barium sulfate purified to a minimum  
paratungstate or ferrotungsten.  
Vanadium which is converted to ferrovanadium or  
purity of 80% barite by mass.  
Beryllium which is converted to copper-beryllium  
vanadium pentoxide.  
master alloy, or purified to a minimum purity of 99%  
beryllium by mass.  
Yttrium which is converted to yttrium oxide which is  
purified to a minimum purity of 99.999% yttrium oxide by  
4
Inst. for Form 7207 (1-2024)  
mass, or purified to a minimum purity of 99.9% yttrium by  
mass.  
Line 8b. Allocate the credit on line 8a, column (e),  
between the estate or trust and the beneficiaries in the  
same proportion as income was allocated and enter the  
beneficiaries’ shares on line 8b, column (e). If the estate or  
trust is subject to the passive activity rules, complete Form  
8582-CR, Passive Activity Credit Limitations, to determine  
the allowed credit that must be allocated between the  
estate or trust and the beneficiaries.  
Other Minerals  
Any of the following minerals, provided that such mineral is  
purified to a minimum purity of 99% by mass:  
Arsenic  
Bismuth  
Erbium  
Gallium  
Hafnium  
Holmium  
Iridium  
Lanthanum  
Lutetium  
Rubidium  
Ruthenium  
Samarium  
Scandium  
Tantalum  
Titanium  
Ytterbium  
Zinc  
Paperwork Reduction Act Notice. We ask for the  
information on this form to carry out the Internal Revenue  
laws of the United States. You are required to give us the  
information. We need it to ensure that you are complying  
with these laws and to allow us to figure and collect the  
right amount of tax.  
Magnesium  
Palladium  
Platinum  
Zirconium  
Praseodymium Terbium  
Rhodium Thulium  
You are not required to provide the information  
requested on a form that is subject to the Paperwork  
Reduction Act unless the form displays a valid OMB  
control number. Books or records relating to a form or its  
instructions must be retained as long as their contents  
may become material in the administration of any Internal  
Revenue law. Generally, tax returns and return information  
are confidential, as required by section 6103.  
Complete Part IV and enter total costs for the  
applicable critical elements from Part IV, line 74, on  
line 6a, column (d).  
Line 7. On a separate Form 7207, enter "Credits from  
Pass-Through Entities" on line 3 of Part I and report your  
total distributive share from:  
Schedule K-1 (Form 1065), Partner's Share of Income,  
The time needed to complete and file this form will vary  
depending on individual circumstances. The estimated  
burden for individual and business taxpayers filing this  
form is approved under OMB control number 1545-0074  
and 1545-0123 and is included in the estimates shown in  
the instructions for their individual and business income  
tax return. The estimated burden for all other taxpayers  
who file this form is shown below.  
Deductions, Credits, etc., box 15 (code V);  
Schedule K-1 (Form 1120-S), Shareholder's Share of  
Income, Deductions, Credits, etc., box 13 (code V); and  
Schedule K-1 (Form 1041), Beneficiary's Share of  
Income, Deductions, Credits, etc., box 13 (code D).  
Line 8a. If you are a partnership or S corporation and you  
elect payment for any advanced manufacturing production  
credit under section 6417(c), report the amount with  
respect to a facility on Form 3800, Part III, line 1b, and not  
on Schedule K.  
If you are a partnership or S corporation electing to  
transfer any advanced manufacturing production credit (or  
portion thereof) for a facility under section 6418(c), you  
must report the total credit amount with respect to your  
facility on Form 3800, Part III, line 1b, and not on  
Schedule K. See the Instructions for Form 3800 to report  
any non-transferred portion of advanced manufacturing  
production credit.  
Recordkeeping  
Learning about the law or the form  
Preparing and sending the form to the IRS  
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2 hr., 52 min.  
0 hr., 50 min.  
0 hr., 34 min.  
If you have comments concerning the accuracy of  
these time estimates or suggestions for making this form  
simpler, we would be happy to hear from you. See the  
instructions for the tax return with which this form is filed.  
Inst. for Form 7207 (1-2024)  
5