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 possession of the United States have the meaning given such terms in section 638. (d) Special rules (1) Restriction on component sourcing No credit shall be allowed under this section with respect to a rare earth magnet if any component rare earth material used to manufacture or produce such magnet is produced in a non-allied foreign nation. (2) Trade or business requirement No credit shall be allowed under this section with respect to a rare earth magnet unless such magnet is manufactured or produced in the ordinary course of a trade or business of the taxpayer. (e) Elective payment for production of rare earth magnets (1) In general In the case of a taxpayer making an election (at such time and in such manner as the Secretary may provide) under this subsection with respect to any portion of the credit allowed under subsection (a), such taxpayer shall be treated as making a payment against the tax imposed by this subtitle for the taxable year equal to the amount of such portion of the credit. (2) Timing The payment described in paragraph (1) shall be treated as made on the later of the due date of the return of tax for the taxable year or the date on which such return is filed. . (b) Credit To be part of general business credit Section 38(b) of the Internal Revenue Code of 1986 is amended by striking plus at the end of paragraph (40), by striking the period at the end of paragraph (41) and inserting , plus , and by adding at the end the following new paragraph: (42) the credit for production of rare earth magnets determined under section 45BB(a). . (c) Conforming amendment The table of sections for subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986