in the United States by the taxpayer during the taxable year if not less than 90 percent of the component rare earth materials of such magnets are produced within the United States. (2) Phase-Out (A) In general In the case of any rare earth magnet manufactured or produced after December 31, 2032, the amount determined under this section with respect to such rare earth magnet shall be equal to the product of— (i) the amount determined under paragraph (1) with respect to such rare earth magnet, as determined without regard to this subsection, multiplied by (ii) the phase-out percentage described in subparagraph (B). (B) Phase-out percentage The phase-out percentage described in this paragraph is— (i) in the case of any rare earth magnet manufactured or produced in calendar year 2033, 70 percent, (ii) in the case of any rare earth magnet manufactured or produced in calendar year 2034 or 2035, 35 percent, or (iii) in the case of any rare earth magnet manufactured or produced after December 31, 2035, 0 percent. (c) Definitions For the purposes of this section— (1) Rare earth magnet The term rare earth magnet means a permanent magnet comprised of— (A) an alloy of neodymium, iron, and boron, which may also include praseodymium, terbium, or dysprosium, or (B) an alloy of samarium and cobalt, which may also include gadolinium or any associated host mineral of a component rare earth material. (2) Component rare earth material The term component rare earth material means neodymium, praseodymium, dysprosium, terbium, samarium, gadolinium, and cobalt. (3) Manufactured The term manufactured means the manufacturing of a rare earth magnet, including the alloying, reduction, strip casting, milling, sintering, recycling, pressing, and metallization of component rare earth material. (4) Non-allied foreign nation The term non-allied foreign nation has the meaning given to the term covered nation in section 4872(d) of title 10, United States Code. (5) United States and possession of the United States The terms United States and