On Sunday, August 7, 2022, the U.S. Senate passed the Inflation Reduction Act of 2022. The legislation contains significant tax savings including, but not limited to:
- Providing significant incentives for individuals and businesses to become more energy efficient by extending, increasing, and expanding credits generally applicable for post-2022 purchases for:
- Purchasing clean fuel vehicles (both new and used);
- Making their homes more energy efficient (rebates are also available for qualified expenses incurred by qualified individuals and entities);
- Making commercial buildings and residences more energy efficient;
- Building/manufacturing more energy efficient homes; and
- Producing clean energy and fuels;
- Increasing the Research Credit against payroll taxes for qualified small businesses for post-2022 tax years;
- Extending the current Premium Tax Credit amounts available to taxpayers who purchase health insurance on state health care exchanges for an additional three years; and
- Limiting and capping various costs Medicare recipients will have to pay for prescription drugs and certain premiums and co-pays, as well as providing free vaccines.
These expanded programs would be paid for by:
- Increasing IRS funding for audits and compliance initiatives;
- Extending the excess business loss limitation for noncorporate taxpayers for an additional two years through the 2028 taxable year;
- Imposing a 1% excise tax on certain stock repurchases, applicable to post-2022 stock repurchases; and
- Imposing a new 15% corporate minimum tax on corporations with average financial statement income over $1 billion per year, beginning with the 2023 tax year.
The bill will now be voted on by the House. It is anticipated the vote will occur on Friday, August 12. The President has announced he will sign the bill.
The current version of the bill is available at:
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