Inflation Reduction Act of 2022
On August 16, President Biden signed the budget reconciliation bill, also known as the Inflation Reduction Act of 2022. The legislation includes several major healthcare, energy, and climate change provisions. While we encourage you to review the bill in full, we have identified key takeaways for SST clients to pay attention to. These key takeaways are summarized below:
- Corporate Tax Provisions
- Establishes a 15% alternative minimum tax on book income for large corporations
- Presents an excise tax on stock buybacks
- Healthcare Provisions
- Extends the Affordable Care Act (ACA) subsidy through 2025
- Caps the annual out-of-pocket drug costs for Medicare recipients at $2,000 beginning in 2025
- Allows the U.S. Department of Health and Human Services to negotiate the Medicare price for certain prescription drugs
- Energy and Climate Change Provisions
- Introduces home energy rebate programs and up to 30% in tax credit for homeowners who increase the energy efficiency of their house
- Creates clean vehicle tax credits for the purchase of certain new and used electric vehicles
- Enables businesses to receive tax credits for enhancing their facilities’ energy efficiencies
- Internal Revenue Service Enforcement
- Provides $79B in funding for the IRS over the next ten years, which are directed to:
- Taxpayer services ($3B)
- Enforcement ($46B)
- Operations ($25B)
- Business systems modernization ($5B)
- Provides $79B in funding for the IRS over the next ten years, which are directed to:
Staying up to date on how this new legislation affects your business’ financial processes can be time consuming and, at times, exhausting. If you would like more personalized assistance with determining how this new legislation affects your organization, we encourage you to contact the experts at SST Accountants & Consultants.
