The Critical Minerals Investment Tax Modernization Act of 2025 modifies tax rules for companies that extract rare earth minerals and related materials used in technology and defense applications. Specifically, it increases the percentage depletion allowance—a tax deduction that reduces taxable income for mining companies—from current rates to 22 percent for rare earth elements (including the 15 lanthanide elements and scandium), making mining these critical materials more financially attractive. This tax change affects mining companies and investors involved in domestic rare earth mineral extraction. The bill does not specify particular funding amounts but provides immediate tax benefits once enacted. The deduction applies to all taxable years beginning after the bill becomes law, meaning companies could begin claiming the higher depletion rate in the next tax year following enactment.
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