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: Biden’s economic strategy and tax changes are designed to promote sustainability and reduce the deficit. By encouraging investment in clean energy, the plan aims to create jobs while also addressing climate change. Additionally, the adjustments in tax code will benefit middle-class families and stimulate economic growth across various sectors. The inflation reduction act tax incentives provide an opportunity for individuals and businesses to benefit from lower rates on green technologies. These incentives could serve as a catalyst for a broader transition to renewable energy practices across the nation. By leveraging these financial advantages, stakeholders will be encouraged to invest more heavily in sustainable solutions.
- 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.
- Increasing IRS funding for audits and compliance initiatives;
- 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.
